Australia and more specifically Queensland appears set for some exciting times in the future after it was announced that Brisbane would be the host city for the 2032 Olympic Games.
While this is a positive for the nation, for property investors, the first thought is naturally what does this mean for property prices in Brisbane going forward?
Many of us understand what the Sydney Olympics did for Sydney as a destination and also what happened to property prices during the lead-up. However, before getting too bullish on the Olympics themselves, it’s important to take a closer look at how this all might play out for property prices.
The first thing to consider when it comes to something like the Olympics is that the actual event itself is only very short. All-in-all, we see people converge on the host city for a period of two to four weeks.
Most of the focus for investment purposes is based around likely infrastructure upgrades. Not only does better infrastructure make a location more appealing, but it also contributes to construction jobs in the many years before an event takes place. This helps drive rents and also housing prices.
The main focal point will be the redevelopment of the Gabba, which will become the main stadium for the Olympics. and also the road and rail projects that connect the city such as the Brisbane Metro and Cross River Rail. We are already seeing $5.7 billion going into rail and tunnel projects in the next two years along with ongoing upgrades of the Bruce Highway and M1. While in all likelihood, the Olympic Villages will be located in Brisbane, the Sunshine Coast, and Gold Coast.
Based on what is likely to come, it does look like Brisbane could be a very nice proposition for property investors and buying now would put you in on the bottom rung.
However, the main consideration from our perspective is that Brisbane and South East Queensland generally, are already a very appealing proposition in terms of an investment opportunity. In reality, the Olympics is really just adding to what is an area that already had huge growth potential and strong fundamentals.
Looking at the current equation and how South-East Queensland compares to the likes of Sydney and Melbourne and it appears it’s already a good option.
Sydney in particular has already seen a spike in prices fuelled by low-interest rates and strong owner-occupier demand. While South-East Queensland has also seen good growth, prices have not yet spiked as sharply as many of the blue-chip areas of Sydney.
Similarly, these price moves have led to incredibly low yields in Sydney, whereas in Queensland a comparable property is likely generating yields of upward of 4.5%, compared to 2% in NSW.
In terms of price point, a $800,000-$1.5 million property in South-East Queensland is more likely to be $1.5 million-$3.5 million in Sydney. Which makes it far more viable in terms of borrowing power and also serviceability thanks to higher yields.
The areas in and around Brisbane, anywhere from 3-15 km from the CBD, will likely see strong demand in the years ahead, irrespective of what lies ahead with the Olympics.
We’re already starting to see Queensland as the leading state in Australia for interstate migration and as COVID continues to play out, we should expect to see that level of population growth remain strong.
On paper, Brisbane and South-East Queensland are clearly a great proposition right now, and that’s not taking into consideration the Olympics at all.
When the infrastructure projects begin and more people catch on to all the great things the region has to offer, it’s very likely that the Olympics will just be the cherry on top.