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. Last Updated: 07/27/2016

Prices Soar in Sochi After Olympic Victory

Real estate prices in Sochi jumped by from 30 to 40 percent virtually overnight after the city last week won the right to host the 2014 Winter Olympics, Swiss Realty Group said in a report released Monday.

President Vladimir Putin has earmarked $12 billion to be invested in getting the Black Sea region ready for the Games, and investment from some of Russia's richest businessmen is already flooding in.

Prices in the future Olympic resort of Krasnaya Polyana are now from $800 to $1,000 per square meter and on the Sochi seafront from $1,500 to $2,000 per square meter, the report says.

"Sochi is at risk of becoming the most expensive city in Russia during the Olympic Games," the report goes on to say.

But the report warns prospective investors that soaring prices could combine with rising supply costs to cause a crisis in the region's liquidity by next year, and advises postponing any immediate plans until the market has had time to settle down.

Despite the general market trend being "firmly positive," Swiss Realty warns that poor quality in many of the Sochi projects could jeopardize future investment flows.