Unless you’ve been living under a rock, you would have heard that Brisbane is set to host the 2032 Olympic Games. Following the announcement, there has been an abundance of articles declaring that this will see Brisbane house prices soar – no – double! Before we determine if there’s any validity to the Brisbane property market forecast, I’m going to explore the following facets of being a host city:
- How other cities have historically benefited or failed to benefit from hosting
- What the Olympics generally means for a city’s house prices
- The infrastructure boom set to take place ahead of the Olympics
- And finally, I will indicate the most advantageous time to invest in Brisbane
Firstly, let’s take a look at how host cities have historically fared in the lead up to and the aftermath of the Games.
According to Corelogic, Sydney property values jumped 60% between the Olympic announcement in 1993 and the actual Games in 2000. Westpac Business Bank’s Chief Economist, Besa Deda said that “The 2000 Sydney Olympic Games were estimated to inject around $6 billion into the Australian economy.”
Westpac has forecast that Brisbane hosting the Olympics could produce at least $17 billion of economic and social benefits for Australia, with around $8 billion of that flowing into Queensland. Further, the event could create 130,000 direct jobs, including 10,000 during 2032. The Value Proposition Assessment from the Queensland Government also expects $20.2 billion in international visitor expenditure.
Beyond the economic benefits
Benefits to host countries aren’t purely economical. For example, Tokyo’s train stations were reconfigured to be physically more accessible for those with disabilities.
There is also a psychological boost believed to be associated with hosting the games. “You may be pinning your hopes on it providing an uplift to community spirit or national pride. It’s hard to estimate the economic value in that,” said Gene Tunny, director of Adept Economics in Brisbane. Richard Cashman, the director of the Center for Olympic Studies at the University of New South Wales also said that the Olympics gave Sydney an enormous psychological boost. There are also benefits to a city’s business standing. Adele Labine-Romain, a partner within Deloitte Access Economics reflected on past host cities, “Hosting the Games allowed cities to make significant strides on a broad agenda in a reasonably short period, whether it was raising their profile in the global marketplace, or kicking off a suite of economic reforms or building projects.”
Of course, one of the most significant and tangible benefits of hosting the Olympics is that infrastructure timelines are brought forward. This can mean the development of better recreational facilities and the delivery of more efficient public transport. All of which residents of a city can enjoy, long after the closing ceremony. In the case of Brisbane, its 30-year plan is likely to be expedited, delivering crucial amenities in time for the Games.
Brendan Lyon, partner with Infrastructure & Projects Group at KPMG Australia, says that Brisbane hosting the Olympics will provide “a unifying and disciplining force around building what is needed.”
Barcelona hosted the Olympics in 1992 and was estimated to have built 50 years worth of infrastructure in the 8 years preceding the Olympics. While Queensland already has roughly 80% of the infrastructure required to hold the event, due to the Gold Coast having hosted the 2018 Commonwealth Games, there are still many infrastructure projects planned.
- Brisbane Arena (also known as Brisbane Live) will get a new underground Cross River Rail and underground Brisbane Metro busway
- Brisbane Football Stadium
- Brisbane Cricket Ground to be demolished and reconstructed
- Brisbane Convention & Exhibition Centre
- South Bank Cultural Forecourt
- Victoria Park
- Brisbane Showgrounds
… to name just a few areas set to be upgraded or completely overhauled in time for the Brisbane Olympics.
The locations in Queensland set to gain the most benefit include Brisbane, the Gold Coast, Sunshine Coast and Moreton Bay. Other areas also likely to see improvements include Cairns, Townsville and Toowoomba.
When to invest in Brisbane
Hosting the 2032 Olympics is a huge opportunity for Brisbane to enhance its profile on the world stage, expedite infrastructure projects and generate jobs. But for this buzz of activity to sustain, long-term planning for after the Olympics needs to be put in place.
Associate Professor at the University Queensland Business School, Sarah Kelly, summarises the golden opportunity: “A successful 2032 Olympics bid would produce extensive, measurable, social and economic impacts for Brisbane, Queensland and the nation.”
These include bringing forward key infrastructure, enhanced health and security, promoting Queensland’s destination image as safe and politically stable and enhancing community pride and connection. And, most of all, “forc governments into longer-term planning, resulting in broader social goals aimed at sustainability, equity and diversity.”.
Brisbane is already a hot property market with strong fundamentals, surging interstate migration and, now, boosted infrastructure funding. If Brisbane property market real estate was performing poorly, you would wait to capitalise on the impact of the Olympics, which “tend to leave a legacy of a permanent housing demand uplift”, according to CoreLogic’s Asia-Pacific Research Director, Tim Lawless.
However, as Brisbane property market real estate is already performing strongly, you can get the best of both worlds by investing now and experiencing long-term growth, not to mention incredibly low vacancy rates. In a previous article, I have discussed how in some parts of Queensland, it is now cheaper to buy than rent.
Queensland has received an influx of interstate migration, has an undersupply of housing and suburbs with vacancy rates as low as 0.6%. Of course, not all areas in Brisbane, Queensland are equally desirable. To invest successfully, you need to consider what property type will suit you best, what area will deliver sustained growth and rental demand, as well as the financial structures you will adopt to facilitate an effective investment.
If you would like to compete in the Brisbane property olympics, speak to an AllianceCorp Property Wealth Planner today.