The Olympics are officially headed for Brisbane, and although some 11 years away, the 2032 Olympic Games are expected to yield a positive influence on the city’s housing market conditions. But to what extent?
Hosting the 2032 Olympics and Paralympics has been described as a “game changer” for Queensland, with certain political figureheads forecasting 20 years of accelerated opportunity for the state.
But could the 2032 Olympics Games be the break theState’s property market has been waiting for?
Ray White chief economist Nerida Conisbee is confident that Brisbane is about to embark on a “golden decade” of property prosperity, labelling the Olympics a “huge drawcard”.
“Queensland is currently seeing the strongest population growth in Australia, with particularly high movement of people out of southern states to South-East Queensland. This strong growth is expected to continue which will have widespread impacts across all price points,” Ms Conisbee said.
Tim Lawless, research director at CoreLogic, is a little more modest, noting that while the Olympics “should” work as a positive influence, the flow-on effects are likely to be gradual and centred around significant infrastructure upgrades and a medium-term uplift in jobs.
“The most significant positive influence on the housing market is likely to be seen in the years leading up to the Olympics, rather than during the four weeks of the Olympic and Paralympic games themselves,” Mr Lawless said.
“Large infrastructure projects tend to have a positive influence on housing prices, with the extra requirement for workers creating additional demand for housing during the construction process,” he noted.
Areas likely to benefit
Without too much insight into where some of these projects will be located, Mr Lawless said that Woolloongabba is an obvious candidate for an uplift in demand, given it boasts the Gabba stadium – the future epicentre of Olympic activity.
“Along with the Cross River Rail terminal and plaza, this precinct is likely to see a lift in desirability.”
Although already fairly popular with investors, with around two-thirds of the housing stock in and around Woolloongabba being rented, Mr Lawless tipped an exponential increase in the area’s likability.
“Currently, Woolloongabba unit prices are at the lower end of the inner south unit markets with a median unit value of $458,000; about $94,000 lower than Kangaroo Point’s median unit value, $85,500 lower than and $38,000 lower relative to South Brisbane. The lower price point combined with upcoming capital investment on infrastructure are likely to be a popular combination with investors and developers alike,” he explained.
Other areas said to potentially benefit include the proposed sites for athlete villages, earmarked for Robina.and
What does the past tell us?
The pandemic has already cast a spotlight on Brisbane’s property market, with the number of $1 million plus suburbs increasing by a third over the past 12 months.
But Ray White Queensland CEO Jason Andrew believes the Olympics are the “real coup” that could truly put Queensland on the global map.
“Our state has long been sought after for its world-class beaches, sunny days and good climate but the lifestyle benefits will now be magnified. Now we can add into this mix infrastructure projects, population growth and the subsequent wage growth,” Mr Andrew said.
According to a KPMG preliminary report into the economic, social and environmental benefits of the bid, an estimated $17.61 billion worth of potential quantified benefits Australia-wide could be delivered by hosting the Olympics.
However, when it comes to the Olympics and property prices, the benefits are less clear.
In a recent paper, the Real Estate Institute of Queensland conceded that while lesser-developed cities have seen major rises in property prices on the back of the Olympics, for highly developed cities, “it’s harder to attribute property price growth to one singular event”.
Quoting Propertyology’s head of research, Simon Presley, the REIQ noted that while London’s median house prices expanded 38 per cent over the five years ending 2013, the outlay to prepare the city to host the 2012 games cost a hefty $16 billion.
As such, Mr Pressley labelled the growth as “hardly a boom”.
And although the 2032 games are tipped to require a significantly smaller investment to host, whether the property market performs well or not would rely heavily on macro and micro factors, including the broader economy, monetary policy and more.
Arjun Paliwal, director at InvestorKit, shares Mr Presley’s sentiments. He is quite confident that the impact will not be “as material as people think”.
In fact, as a direct result of the more economic budget, Mr Paliwal doesn’t believe a large-scale facelift is on the cards for Brisbane.
Citing former mixed results, he drew attention to Brisbane’s current property wins, noting that they should not be attributed to the Olympics.
“The main impact, pending a clear vision and execution from leadership, can be from the lasting impacts of city changing infrastructure, and tourism demand if the city establishes itself as a great place not only to work and live but to visit.
“Brisbane at the moment has very low housing inventory, alongside rental vacancy. Causing an upwards swing in both prices and rents. So, for attribution currently to the Olympics is not true and correct as it was already positive pre announcement. Similar to over 90 per cent of other positive trending locations in Australia’s current housing boom,” Mr Paliwal explained.
International visibility could lead to many wins
But others are arguing that it’s not the promise of an urban uplift or the job creation that are necessarily expected to spark growth, it’s the all-important global exposure.
In a recent report exploring the benefits of the Olympics on Queensland’s property market, Colliers noted that the international visibility that comes with hosting the games could increase the state’s share of both overseas migrants and transnational companies looking to operate in Australia.
“This exposure has the potential to consolidate Brisbane and SEQ as an attractive geographical location for global capital looking at diversifying their investment portfolio across Asia Pacific markets,” Colliers said.
It suggested that as a result, areas such as the Gold Coast southern beaches is set to become one of the most prestigious residential markets in Australia.
“We believe that hosting the 2032 Olympic Games in Brisbane will accelerate an era of state growth and provide a range of opportunities for property investors over the next 10-15 years,” the report, led by researchers Karina Salas and Joanne Henderson, reads.
But while opinions and assessments are mixed, one thing is for sure – the certainty the games are coming to Australia for a third time has tongues wagging, and that can’t be a bad thing.
Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.