As the spotlight shines on Birmingham hosting the Commonwealth Games this week, we’ve answered some of the key questions regarding the economic impact and how it will shape and boost the community of the city. Read on to find out everything you need to know about ‘Birmingham 2022’.
What is the purpose of the Commonwealth Games?
The Commonwealth Games has a notable reputation as the second most important international multi-sporting event after the Olympic Games. Comprised of 72 nations the Commonwealth represents one third of the world’s total population. It takes place across 11 days every four years and has over 5000 athletes competing in 19 different sports. The purpose of the event is to build peaceful, sustainable and prosperous communities globally by inspiring Commonwealth citizens through the ambition and impact of their athletes. Having first started in 1930, the Games have since put a spotlight on host cities and uplifted communities immensely through bolstering both economic activity and local area regeneration.
How have the Commonwealth Games affected economies?
Historically, host cities have seen tremendous economic growth and prosperity from the Commonwealth Games both in preparation for hosting it and, in the ripple effect, long after the spotlight has left the city. The previous Commonwealth Games was hosted in 2018 at the Gold Coast, Australia and contributed £1.2 billion to the economy. The improvement to infrastructure and new sporting facilities drove the development of related industries (such as engineering, construction and tourism), stimulating job growth across the region.
A new report by the Commonwealth Games Federation and PwC has revealed a consistent economic boost of over £1 billion across previous host cities as a result of the Games. Host cities have seen fiscal dividends from national, regional and other levels of government. In the UK, Manchester (host of the 2002 Games) saw £2.7 in investment from the national and devolved government for every £1 of local government spending on total Games-related expenditure, whilst Glasgow (host of the 2014 Games) saw £3 for every £1 of local government spending. The report also indicated that cities have seen up to a 25% increase in tourism in the three years after hosting as well as up to £400 million of Commonwealth investments and trade deals. The Games have both built and showcased Manchester and Glasgow’s economic profiles and catapulted interest in the vicinities as desirable locations to live and work.
What is the impact of the Commonwealth Games on Birmingham in 2022?
In December 2017, Birmingham was awarded the rights to host the 2022 Commonwealth Games, the largest sporting event in the UK since the 2012 Olympic Games in London and certainly the largest to ever come to the West Midlands.
Like Manchester and Glasgow before, the Birmingham Games has been a catalyst for investment both directly and indirectly. The city secured a £778 million investment for hosting the Games, and Birmingham City Council estimated around 4,500 jobs were created as a result.
In terms of major regeneration hotspots, the Alexander Stadium has received £72 million worth of redevelopment and been upgraded to hold 40,000 spectators for the Games. The city centre has been renewed with £25 million invested to revitalize public spaces and improve security measures at 19 locations. Infrastructure has seen immense improvement with £500 million spent on roads, rail and cycling routes in the vicinity of Perry Bar where the Games will be hosted. 5,000 homes are also expected to be newly built.
The Games will also generate additional revenue through ticket sales, sponsorship, merchandising and the sale of broadcast rights. The city will welcome over 1 million spectators from around the globe over the course of the 11-day event that started on July the 28th. Furthermore, 1.5 billion people are expected to tune in virtually to watch, elevating the city to the world stage.
How will the Commonwealth Games impact Birmingham property and rental prices?
The UK is currently experiencing a country-wide housing stock shortage and Birmingham is no different. Being so well located, the city has seen an explosion in house price growth and demand is set to further grow underpinned by the publicity of the Commonwealth Games.
Historically, there has been a direct impact of the Commonwealth Games on a host city’s property prices. Most recently, Glasgow saw a property price decrease of 8.6% in the five years up to the 2014 Games largely rebounding from the GFC but growth took a turn after playing host city and house prices increased a cumulative 27% up to 2019. Manchester, on the other hand, saw the strongest marginal change in growth when it hosted the Commonwealth Games in 2002. Prices had grown 63% in the 5-year lead up to the event but exploded to 140% in the five years after.
The future for Birmingham real estate investors is bright. In fact, JLL in their UK Residential Forecasts report, listed Birmingham as the city anticipated to see the highest price growth in the UK averaging 5% annual growth over the period of 2022 to 2026. Bolstered by the Commonwealth Games, the region will continue to see price growth due to increased connectivity resulting from the HS2 rail. The London to Birmingham leg will open in 2026, making the capital city commutable in under 45 minutes.
With extensive urban regeneration, stronger employment opportunities and better infrastructure, Birmingham is one of IP Global’s first choices when it comes to finding pockets of value. Take a look at our latest Birmingham insights here.
