So, Brisbane got the good news recently — we will host the 2032 Olympic Games!
But what will that mean for our property market?
If history is anything to go by, home buyers and investors could be in for some strong property gains.
CoreLogic has highlighted that Sydney property values jumped 60% between the Olympic announcement in 1993 and the actual Games in 2000.
In the 5 years following the 2000 Olympics, Sydney prices rose a further 90%, while Barcelona saw prices rise 40% following the 1992 games.
While the devil is always in the detail, and there are many factors involved in this growth, these figures are compelling.
Should we believe the hype and is the Olympics a magic bullet for property prices.
Here are my thoughts and the opportunities I see ahead in Brisbane.
Within hours of the announcement came a series of flashy headlines.
Westpac kicked things off suggesting that the Olympics will see a $17 billion boost for Australia with more than half of that benefiting Queensland.
PRD’s chief economist was quoted as saying Brisbane house prices could more than double by the time the Olympics even starts.
There are always differing opinions, but there is no doubt that many investors will believe that Brisbane is set to benefit.
As the saying goes Perception is Everything.
There will always be the type of investor that follows the headlines or chases the next hotpot.
As a result, we will no doubt see a rise in demand for investments in Brisbane, purely because of the “perception factor.”
This will also see many large companies and developers position themselves in the lead up to take advantage of the expansion of Brisbane over the coming decade.
But, as a savvy investor, it is important to understand not all locations and not every property will benefit from this “Olympic effect.”
I had to laugh at how the ABC reported the Brisbane announcement.
In short, a meeting of Mayors from across Queensland could foresee that they had another 2 million people joining them over the next 20 years and they needed better infrastructure.
More modern transport and infrastructure system between the councils of Brisbane, Moreton, and the Sunshine and Gold Coasts was the order of the day.
The Olympic games may be the ideal solution.
There is no doubt that the infrastructure projects and large capital works are going to be a key contributor for stronger growth leading up to the Olympics.
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Add to those stadium expansions and athlete’s accommodation and it will start to change the landscape of Brisbane.
Furthermore, it has been estimated that the Olympics alone, will generate around 100,000 new jobs with infrastructure developments to lead the way.
Many of those jobs will need to be filled by interstate and overseas professionals and they will require somewhere to live.
This in turn will create higher demand for housing throughout select areas of South East Queensland.
In the past decade, slower jobs and population growth have been a major hindrance for Brisbane property prices, but the decade ahead looks incredibly bright.
Tourism will also benefit greatly and many of the areas struggling through the COVID pandemic and lockdowns will hopefully reap the benefits.
There is no doubt this Olympic Games will really put Brisbane on the map.
While there is excitement out there in the media and the community is buzzing, there are those that are not buying into all the hype.
Much of this is related to whether the cost to host the games will be worth the substantial outlay and if it will result in the associated benefits being touted.
The cost to prepare and host such an event can really add up, after all, it ended up costing $4.2billion for the Sydney Olympics.
Though that pales in comparison when compared to $40 billion for the 2008 Beijing Games and $14.6 billion for the 2012 London Games.
So, you can see why some may be skeptical in asking if it is really worth the huge cost.
Both sides can and will continue to debate the pros and cons over the next decade, but for me I see opportunity.
However, there will be better opportunities for select locations and also for different types of properties.
There is no doubt demand will increase, as we see job opportunities and population growth ramp up in the lead-up to the Olympics.
With that in mind, I would be looking for areas with a shortage of supply, specifically a shortage of land.
High demand and low supply are a part of the fundamentals for an asset returning above average, wealth-producing rates of return.
There is no doubt that a house in a good suburb with a high land-to-asset ratio within 5-15km of Brisbane, will fit this category.
For the budget-conscious, a Townhouse with 7km of the CBD would also be a strong option as the council cracks down on development in middle ring pockets.
The infrastructure upgrades will also be crucial in adding liveability and convenience to preferred suburbs.
If PRD Economist Diaswati Mardiasmo is right and property values double, you could be looking back wishing you had made the most of the opportunity.