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Sochi landowners set for windfall

Winning the bid for the 2014 Winter Olympics means Sochi will receive a multi-billion dollar face-lift. Massive construction projects could mean land and property prices in Sochi will skyrocket, and anyone owning land in Sochi has a chance of becoming a m

The team behind Russia's successful bid for the 2014 Winter Olympics has arrived home to a victorious welcome. Ahead of them are seven years of hard work and a lot of promises to fulfil to get the resort of Sochi ready in time and on budget.

Crowds gathered at Moscow's Sheremetyevo airport all as one, sporting the Sochi Olympic t-shirts, Russian flags and clutching bunches of flowers. To them, the sportsmen represent victory and they've brought it home. And even though it's taken the Olympians nearly a day to fly back, they smiled through their jet lag.

“It is a real breakthrough. We made it! We are tired, but we can take a time-out. We should get town to work tomorrow to have the best facilities built within seven years,” smiled Olympic bid CEO Dmitry Chernyshenko.

The triumphant team knows a staggering amount of work needs to be done.

“IOC rules do not ask to keep members, but I think those people who were working in the bid team will now form the organising committee, because IOC asked us to start working on the games as fast as possible,” said Sochi 2014 Ambassador Svetlana Zhurova.

Meanwhile, the real hard work has already begun. President Vladimir Putin has already organised a Co-ordination Committee which will oversee the entire development of Russia's Black Sea resort of Sochi over the next seven years. It is known $US 12 BLN is going to be spent on infrastructure and generally on all sorts of aspects which will change the area dramatically. A quarter of this amount will be spent on the energy supply. This is due to the fact that with heavy snowfalls which are quite often in winter in the area of Sochi the power systems are overloaded and this might cause massive blackouts. The money is coming mainly from the government but a certain sum will come from private firms. The tendering process will begin next week. Many national and international investors are expected to be trying to get hold of the contracts and start 'building the dream'.

It promises to improve Sochi's infrastructure. On the one hand this may inconvenience residents and tourists, but on the other, Sochi landowners may become millionaires. Even areas that were recently swampland now cost the same as land in Moscow.

“I can only imagine how much it costs,” said Anna Magdisyan, school teacher, speaking about her spacious new flat. It was presented to her by the city's administration for decades of work as a school teacher. Anna enjoys a good view and finds it hard to believe she's a potential millionaire. “Of, course it's hard to think of the exact price of the flat. What I heard was the figure of $US 200,000,” she supposed.

“I expect the real estate prices to go up 5% to 7% each month. They have already started growing, and we expect them to rise up to 15% very soon. During the next seven-eight years they will definitely be going up every month,” Eduard Fillipov, real estate manager, assured.

For the last five years, realty prices in Sochi have been growing steadily. People from all across Russia have been buying property on the Black Sea coast, increasing the cost of the land here. In 2002 a flat in the downtown area cost around $US 15,000. Now it is over $US 60,000 with prices ranging from $US 2,500 to $US 10,000 per square meter.


Flats in this apartment block, which is still under construction, are estimated at $US 1.8 MLN each, and they're already sold out.


Real estate experts say now with the upcoming Winter Olympics construction of residential buildings will gather more pace, and there are plans to use all the available space.

“We are going to build five hotels, three, four and five stars, over 200 hectares, with the total amount of rooms to be about 3,200. We're also going to build exhibition halls, entertainment and shopping centres. We're also planning to build about 600,000 square meters of housing, and, of course, the Olympic facilities,” Vladimir Sheyanov from the Bazovyj Element company said.

For now, Sochi's realty prices haven't yet hit the ceiling. It seems to be just the beginning.

Experts say it is yet impossible to say how much Sochi's land will cost by the year 2014. But given the upcoming influx of investment into the city it could be up to 10 times more than now. In seven years this could become the most expensive land in the whole of Russia.