The surge in interest in Brisbane’s property market during Covid, coupled with the current state of burgeoning interest rates means that investing in Brisbane in preparation for the Olympics is an unprecedented question. Unlike the property investment patterns of past hosting cities, Brisbane’s already “overpriced” market won’t offer the quick growth seen in prior cities. But, with Brisbane’s excellent infrastructure investment, the slump after the Olympics is likely to be less extreme than in cities like Rio. It comes down to the city’s pre-existing economic conditions, infrastructure improvements, and the legacy of the Olympic Games.
Investing in Property Before the Olympic Games
What are the key factors that will influence property values prior to the Olympic Games?
Preparations and Infrastructure Investment
In the years leading up to the Olympic Games, the Queensland Government will invest heavily in infrastructure development, including sports facilities, transportation networks, and urban regeneration projects. These will extend as far as the Scenic Rim, The Sunshine Coast and Gold Coast. These developments can contribute to an increase in property values in the areas undergoing transformation. Brisbane’s ongoing problems with traffic congestion are also on the table to be addressed prior to the Olympic Games. Traffic reductions will no doubt, have a positive impact on property values, especially in suburbs between Brisbane and The Gold Coast.
Real Estate Speculation
Anticipation of increased tourism, business opportunities, and global attention leads to real estate speculation. Property investors may acquire properties in the host city, hoping to capitalise on potential appreciation in value during and after the Olympic Games. We drive up our own prices. This is where early investment in the right areas comes into play. Location. Location. Location. And… timing.
Gentrification and Redevelopment
Olympic preparations may lead to gentrification in certain neighborhoods, attracting higher-income residents and leading to property value appreciation in those areas. In Brisbane, former working-class areas like Petrie and Beaudesert are tipped to receive large redevelopment investments. The Olympic Village, however, will be in the already affluent Northshore Hamilton area.
What Happens to Property Prices During the Olympic Games?
Short-Term Rental Demand Surges
During the Games, there is typically a surge in demand for short-term rentals, such as vacation rentals. Note that with the future of AirBnB currently in doubt, advanced bookings on this platform may fall through with its collapse. This increased demand can result in higher rental prices and, in some cases, temporary spikes in property values in close proximity to Olympic venues.
Limited Impact on Residential Property
While commercial and tourist-centric areas may experience short-term benefits during the 2032 Brisbane Olympic Games, the impact on residential property values may be less significant as housing markets are generally less affected by short-term events. Brisbane’s property market is already inflated. While there’s still nearly a decade to go before the Olympic Games, the market’s potential to shrink is offset by the ongoing increase in population through domestic migration and severe housing shortages.
After the Olympic Games – The Risks Increase
The fallout from Olympic Games hosting varies from host city to host city. While tourism businesses (and in some cases commercial property) enjoy an ongoing surge in interest following the global showcasing of the city as a destination, the property market often fares poorly.
Mixed Impact on Property Values
The post-Olympic period can be more variable in terms of property values. Some host cities have experienced a modest, long-term boost in property values, especially in areas that have undergone significant redevelopment. In contrast, other cities have seen limited lasting impact on property values.
Oversupply Concerns Unlikely to Impact Brisbane
The biggest potential impact on property values is oversupply. Previously, cities have invested heavily in large-scale Olympic Villages and accommodation for international visitors, which then lies fallow, dragging down property values city-wide. This is a real concern for investors around the Olympic Games period. It won’t be the case in Brisbane. Brisbane, Redlands, Moreton Bay and The Sunshine Coast are all currently in a housing availability crisis. While the Queensland Government attempts to alleviate it (with everything from building incentives to modular prefabricated houses) the population growth rate continues to outstrip the housing availability. While it’s been a key factor in driving up prices in the past, it’s unlikely that one event will come close to putting a dent in the crisis.
The true impact of hosting the Olympics on property values often lies in the lasting legacy of the Olympic Games. If the infrastructure improvements and urban regeneration projects continue to contribute to the city’s growth and development, property values in those areas may continue to appreciate over time. In Brisbane, the world-class and cutting-edge Air Taxi Hub (proposed for Petrie, in Moreton Bay Region) will be a revolutionary approach to infrastructure improvement, not just for the Petrie area. Brisbane’s City Council is among the largest in the world. Brisbane’s population is spread over a massive geographical area, which extends to the Sunshine and Gold Coasts. The introduction of local air taxi services will mean easier access to outlying areas and faster commute times between Brisbane and the Coasts. This may well be the biggest legacy of the Olympic Games on the city.
Should you Invest in the Brisbane Property Market Prior to the Olympic Games?
Brisbane’s excellent infrastructure investment alleviates some of the biggest risks to Olympic Games property investment. The smart investment however, may be looking to commercial property. The massive shrinkage in commercial property occupancy in the post-covid fallout may well be an opportunity for investors. The Olympic Games, while a nice, friendly global celebration of human sporting achievement, is, in the end, a commercially motivated event. Tourism during, and following the Games brings in the “return” on the government’s investment.