Is it game on for East London?

As sports stadiums rise from the building sites of Stratford and sleek new homes join the market, Jonathan Christie finds out if it really is time to buy into the Olympic spirit

The East London market that mushroomed up around Stratford when the London 2012 Olympic bid's victory was announced in 2005, has already seen it's fair share of boom and more recently, bust. But the hiatus in sales could to be coming to an end with the Games on their way and the promised housing and regeneration projects fast becoming a reality.

With all eyes focused on what the East will inherit once the athletes are gone, "Legacy" has become the keyword. At the 250-acre Olympic Park the main sporting structures are now taking shape, but the regeneration challenge is to ensure the area is not left with a cluster of state-of-the-art sports buildings marooned in an urban desert. With local residents and politicians of all parties demanding the feel-good factor ripple out beyond the Olympic Park for years to come.

"The scale of regeneration at Stratford is almost unprecedented since the creation of Canary Wharf two decades ago," says Lucian Cook, Director of Residential Research at Savills. "This is principally driven by the Olympic Park and the construction of what will be Europe's largest shopping centre, Westfield's Stratford City, which is on course for completion in March 2011. The next challenge will be attracting buyers from outside the local area."

On paper it's looking good. Just over £9bn is being spent on infrastructure and new facilities while the transport links are already there – two Tube lines, overland rail and the Docklands Light Railway as well as Eurostar and the nearby City Airport.

There's also the "Olympic Arc" scheme that aims to improve public spaces, build 30 new bridges and create a two-mile Lea River Park to connect the Olympics site with the Thames. These improvements are shored up by the plan to build 12,000 new homes within The Park and in the surrounding communities of Bow, Hackney Wick and Canning Town, of which nearly 30 per cent will be within the Athletes' Village and therefore underpinned directly by the Olympics.

But are these developments enough to reignite the East's property market during the countdown to the Olympic flame arriving? The hard times experienced by developers over the last two years have meant there are fewer new homes available and in 2009, the average house price in Stratford remained 34 per cent lower than that of Greater London as a whole. But with new one-bedroom flats starting at about £185,000 – still 20 per cent down from the peak – is now the best time to become part of this area's future?

"Whether you buy now depends on your strategy," says Cook. "Property selection is key as you should aim to buy something that will benefit from an identifiable improvement in neighbourhood and amenities. There is an opportunity to buy now and sell in the immediate run up to the Olympics before new stock comes to the market, or sell once that new stock has been absorbed. You will probably want to avoid selling when new properties are available in volume immediately after the Olympics. But waiting may mean you miss out on any regeneration uplift."

Established communities such as Victoria Park and Canary Wharf already have good schools and facilities. It's areas like Stratford that have failed to tempt the owner-occupiers in any great numbers so far. It's been slow to shake its hard urban appearance and lacks the charm of its metropolitan neighbours. But further affordability and the slow disappearance of post-industrial dereliction is beginning to soften its image.

Up-and-coming developments include Athena (020 7718 5223), 298 apartments on Stratford High Street with prices for 2-bedroom flats from £295,000 and Lett Road (020 7718 5220), 64 apartments with a communal roof terrace and views over the Olympic Park. Prices here start at £185,000. The OneStratford tower (01992 809800) also has a prominent position overlooking the Olympic Park. There's 24-hour concierge and a Car Club. With prices for one-bedroom flats starting at an affordable £200,000.

New-builds like these will prove pivotal for East London. According to a recent Knight Frank report, sales of new-build homes in London rose by a remarkable 214 per cent in the last full quarter of 2009. It concludes that this is not due to an overhang of discounted units, but a lack of available supply. Over the past five years in nearby Newham, the average premium for new build flats over their second-hand counterparts has been as much as 48 per cent. It's these underlying trends that are fanning the flames of optimism in Stratford.

Local Agent Bairstow Eves are seeing a huge surge in demand for property, despite worries about the national property market as a whole. "We've had a fantastic February," says one of their staff. "There are more people looking to invest and a lot more first-time buyers coming through the door. Our lettings department is also very busy. Confidence is definitely returning. There's not enough property to go round – resale or new build – and we've seen competition between buyers increase. It's pushed the prices up recently by as much as £10,000."

While East London has a 55 per cent share of all future developments in the capital, most have yet to be started. However, the political pressure to successfully "deliver" the Games will guarantee substantial progress during the build up to 2012, giving Stratford and it's environs the push it needs to thrive long after the flame is extinguished.