The 2022 federal election: What to expect for housing affordability
Unless a structural change to the Australian economy takes effect, greater housing affordability is not likely to happen...
With the 2032 Olympics on the cards, Brisbane has been tipped as one of the country’s hottest spots for investing. But one expert is cautioning prospective investors eyeing a purchase in the Queensland capital not to assume the whole city is gold.
Buyers must ensure they’re doing granular research on Brisbane’s submarkets, Pete Wargent, co-founder of BuyersBuyers, said, and considering the region’s post-Olympics trajectory, as well.
“Like many of the widely held beliefs in property markets, there may be an element of truth in the hosting of the Olympics delivering a boost to aggregate demand. Everyone talks about Sydney’s boom when house prices all but doubled over half a decade up to 2001, for example, and the Olympics may have played a part in that story, with prices booming in the lead up to the event,” he said.
That’s not the whole story, though, according to Mr Wargent.
“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,” he said.
London’s Olympics story held if not the same, then a similar fate for property prices.
“There’s no disputing that property prices had a solid run in the lead-up to the 2012 Olympics, rising 37 per cent over five years from 2009 to 2014. But 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,” Mr Wargent said.
The buyer’s agent said the element to focus on is the rapid investment in suburbs that stand to gain from development related to the games.
Here, London provides an example, in the massive regeneration that took place in areas like Newham, or in other boroughs that hosted elements of the event, such as Barking and Dagenham, Waltham Forest, Greenwich, Tower Hamlets, and Hackney.and
“Not only did all of the host boroughs experience sustained outperformance in property prices over the course of a decade, but the regeneration schemes in many cases resulted in a lasting transformation,” Mr Wargent explained.
“Of course, not everyone benefited from the changes,” he added but noted that the positive lasting impact of jobs and economic growth in these areas lasted even as the games came and went.
When it comes to Brisbane, Mr Wargent said that buyers might consider areas like Woolloongabba, with infrastructure upgrades set for the centrally located neighbourhood on the cards, and Dutton Park and , where housing prices have traditionally been more affordable than some nearby suburbs. They might quickly prove more attractive with an influx of infrastructure spending.
But he also noted it’s important to take a detailed view when buying in Brisbane, assessing particulars like the flooding risk and noise concerns of any particular offering.
“Due diligence and strong property selection is important,” Mr Wargent emphasised.
“The Olympics coming to Brisbane is uplifting news, no doubt. It will put the city on the international map, and the associated investment in infrastructure will be very welcome. But remember 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 more granular research.”