Brisbane house prices could more than double by the time the 2032 Olympic Games roll around, taking median home values above $1.4 million, an economist predicts.
PRD chief economist Diaswati Mardiasmo said this growth rate would be consistent with the market’s past performance during the G20 summit in 2014 in Brisbane, when dwelling prices surged 112.7 per cent over 12 years from when the event was announced in 2003 to 2015, a year after it was held.
“The G20 2014 summit was the closest we have with the Olympics, to understand how house prices could perform, and we can see that Brisbane could easily eclipse that performance, given how strong the market is going right now,” she said.
“If we use the growth rate to project the next 12 years, we can expect to see the Brisbane median house price could soar to nearly $1.5 million. Even if we only get half of that growth, house prices would still surge to at least $1.2 million when the Olympics roll along.”
CoreLogic research director Tim Lawless said if the Sydney 2000 Olympics were any indication, Brisbane could be tracking a similarly strong performance.
Between when the Olympics were announced in September 1993 and when they were held in September 2000, Sydney dwelling values jumped by 60 per cent, almost twice the growth recorded across the broader combined capital cities benchmark region, which grew by 34.6 per cent, CoreLogic figures show.
“The Olympics and associated capital works were likely to be a key contributor to the higher rate of growth in the lead-up to the Olympics,” Mr Lawless said.
“The trend in Brisbane could be similar, in the sense that Brisbane has a good chance of outperforming the larger capital cities, but it’s hard to attribute that entirely to the Olympics and associated capital works.
“Brisbane is remarkably more affordable than the larger capitals and is already attracting the highest rate of intestate migration since late 2003, which are other factors that should help to boost Brisbane’s performance.”
Louis Christopher, SQM Research managing director, said Brisbane could enjoy an even longer Olympics-induced bounce.
“Regardless of the Olympics, Brisbane is likely to outperform the market as it’s due for a surge after years of sluggish growth,” he said.
“So the probability is that outperformance could go on for longer than one or two years post-Games.”
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.
“Developers are likely to position themselves early, looking to secure development sites with the intention of capitalising on increased investor demand in key areas,” he said.
“I think developers will be aiming to position themselves in key precincts early. Although the Olympics are still 11 years away, much of the work will be under way well before this.
“We are likely to see increased competition among developers for prime development sites, especially around the inner south where so much of the infrastructure activity is taking place.”
Veteran Queensland developer Don O’Rorke said greater even than the tangible benefits of infrastructure development, was the intangible boost of becoming an Olympics host.
“There are a lot of tangible things that will come from it; stadiums, roads, hotel stock, all manner of infrastructure needs to be built over the next 10 years,” he said.
“But I’m most excited about the intangible benefit of becoming an Olympics city. It’s very hard to measure, but the confidence that brings with it, in terms of people making decisions to allocate capital to Queensland, to move to the state, to buy second residences or to base their companies in Queensland.”
Source: Australian Financial Review, 22 July 2021, https://www.afr.com/property/residential/olympics-to-fuel-brisbane-housing-boom-20210722-p58byy