The 2032 Brisbane Olympics will deliver a timely boost to the economy and housing market in south-east Queensland, but history shows that property investors wanting to genuinely benefit will need to get granular with their research.
Olympics is the icing for Brisbane, not the cake
The south-east Queensland property market is currently robust, with demand driven by relative housing affordability, an improved local economy, strong internal migration, and surging demand in the lifestyle locations of the Gold Coast and the Sunshine Coast. Regardless of the impact of the Brisbane Olympics, these fundamentals have resulted in fierce competition, particularly for freestanding houses, with solid capital growth expected over the long term.
As with many of the widely held beliefs in property markets, there is an element of truth in cities hosting the Olympics experiencing a boost to aggregate demand. Everyone talks about Sydney’s boom when house prices nearly doubled over half a decade up to 2001, for example – and the Olympics may have played a small part in that story, with prices booming in the lead-up to the 2000 Games.
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What’s not mentioned so often is that after the Sydney cycle peaked – when interest rates were hiked twice in a ‘double tap’ on the brakes in late 2003 – the Sydney market then underperformed all of the other capital cities for six or seven years.
A similar point could be made about the impact of the Olympics on the housing market in London. There’s no disputing that property prices had a decent run in the lead-up to the 2012 Olympics, with London’s prices rising by 37 per cent over 5 years from 2009 to 2014. But then, since 2017, the London market has been a relative underperformer, as the pandemic saw a general shift in demand to the regions of the country.
Therefore, investors who seek a long-term wealth creation need to be granular and avoid costly mistakes.
Key learnings from the UK Olympics
A key takeaway message from the London Olympics was the massive regeneration that took place in areas like Stratford and Newham, and the other London growth boroughs to host the Olympics, namely Barking & Dagenham, Waltham Forest, Tower Hamlets, Greenwich, and Hackney. Not only did all of these boroughs see sustained outperformance in property prices for a decade, but the regeneration schemes resulted in a lasting transformation in many cases.
For balance, it should be said that delivering the regeneration schemes was not always plain sailing, and of course, not everyone has benefited from the changes. Overall, there was a positive lasting impact in economic growth and job creation in the growth boroughs and for many years after the Olympics.
South-east Queensland’s Olympian boost
Sydney and Melbourne have outperformed over the past decade, both from an economic and a housing market perspective and as a result, south-east Queensland has become more affordable than the southern counterpart cities.
South-east Queensland has always enjoyed strong internal migration and is considered to be a highly preferred lifestyle area in coastal Australia. And the onset of the pandemic and the advance of working from home and flexible working arrangements have clearly accelerated these trends.
Indeed, population growth in Queensland is now leading the nation.
The Gold Coast and Sunshine Coast lifestyle locations, which enjoy very good access to Brisbane, are experiencing outstanding demand as more Australians look for a sea-change. This, together with the planned improvements in the infrastructure, will only add fuel to that trend.
Aside from affordability and lifestyle, the improving local economy will also be a factor. Following the end of the mining boom, the labour market in south-east Queensland was not strong, however, in recent years, there’s been an improvement in the employment conditions. And we know that there’s a strong connection between a strong economy and demand for housing.
As for the direct impact of the Olympics, the event will undoubtedly add significantly to long-term projections. The hosting of the Olympics is expected to cost at least $5 billion, but when we include all of the likely associated infrastructures, the total investment will significantly exceed this figure. These investments not only will create jobs, but they will also provide substantial improvements to the infrastructure in Brisbane and south-east Queensland.
Getting granular at the suburb level
Investors hoping to benefit from the Brisbane Olympics boom would need to do their research, get granular, and avoid costly mistakes. One of the common mistakes is that investors become carried away with the hype and let the fierce competition cloud their judgement.
At BuyersBuyers, we take a more analytical approach and work with our clients to minimise the emotional impact. For example, we’ve long regarded the suburb of Woolloongabba as a gentrification play, and as Brisbane is set to host the Olympics has only cemented that view, with the Gabba stadium and Cross River Rail station representing just two of the coming improvements. Dutton Park and Albion are two other locations where housing prices have traditionally been more affordable than some of the surrounding suburbs – but may now experience favourable investment and infrastructure.
There are always more and less desirable property types and streets in these sorts of locations, and it’s important to take a more detailed view when buying in Brisbane. For example, some low-lying areas may be impacted by flood risk or road-noise, so due diligence and strong property selection is important.
We already know that Hamilton Northshore will be developed into an exciting hub for living. We would stick to buying units there with water views, as this will be the critical point of scarcity as all the new development comes online. Water views tend to be a strong and enduring drawcard in Australian property markets.
Another excellent spot for growing housing demand will be the desirable streets of Yeronga and Yeerongpilly, as the tennis comes to town at Tennyson and the urban regeneration continues apace, and as the Cross River Rail connects the south side of Brisbane back up to the Gabba and the City.
The Olympics coming to Brisbane is uplifting news.
It will put the city on the international map and the investment in infrastructure will be very welcome. But investors should remember that this is only one factor of many impacting the housing market, and if your goal is specifically to benefit from the Olympics then you’ll need to conduct some more granular research.
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