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Brisbane’s race to the Olympics What the 2032 Games mean for Brisbane property and beyond.
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September 2021
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Scott Kuru
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Founder & CEO
If there was ever a time to invest in Brisbane property, that time is now. In the words of Brisbane Lord Mayor Adrian Schrinner; “You literally couldn’t buy the type of name recognition that the Olympics would bring to a city,” and with the news of the Games returning to Australian shores in 2032, we take a look at what that means for property investors in the sunshine state. Traditionally, Olympic events tend to leave a lasting legacy on the host cities in the form of improved transport, new amenities and even through additional employment opportunities. Now with Brisbane set to receive the baton, investors can expect many long lasting impacts benefiting the local economy in the form of major infrastructure developments and overhauls. This is yet another triumph for the region which is already benefiting from several recent and soon-to-becompleted projects that originally formed part of over $10bn worth of government spending. Add the 2032 Olympics into the mix and property investors could be looking at a long-lasting period of sustained, and exponential, economic growth.
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Brisbane’s race to the Olympics
The impact of the Olympic Games has far reaching implications outside of the actual event itself, which lasts only a few weeks. First comes the ‘preparation phase’ in the lead up to the event, and followed by the ‘after phase’ which can be felt for decades. For example, looking back at the 2000 Sydney Olympic games we see a significant impact made on the City. Apart from several transport infrastructure upgrades, such as the eastern distributor and the airport link,
the longest lasting impact from the 2000 Games has to be the clean up and revitalisation of the Sydney Olympic Park Precinct at Homebush, considered the heart of Greater Sydney. The Homebush Bay region today is completely unrecognisable from its former status as a 400 hectare toxic waste dump. Contaminants included petroleum and chemical waste, power station ash, demolition rubble and domestic garbage. The Homebush Bay region, prior to the 2000 Olympic Games (Source: Sydney Olympic Park Authority SOPA)
Brisbane’s race to the Olympics
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The announcement in 1993 of Sydney being host to the 2000 Olympics provided the NSW government with more than enough justification to spend over $130 million to comprehensively remediate the area. More than eight million plants and trees were planted to transform Sydney Olympic Park into a precinct filled with greenspaces and parklands.
In terms of house prices, the median house price of Sydney City grew by 79% (equivalent to $139,000) in the 7-year period between 1993 when the Sydney Olympics was first announced and the event in 2000.
Now, Sydney Olympic Park is home to more than 4,000 residents and is visited by almost 10 million people each year for business and leisure – more than double that of the number who attended the 2000 Olympic and Paralympic Games.
Then, in the 3.5 years that followed, Sydney entered a rapid growth phase where the median house price grew 81% ($255,000).
The work that took place paved the way for the transformation of nearby suburbs, particularly Rhodes, as well as the formation of new suburbs at Wentworth
The suburbs near the Sydney Olympic Park also experienced a growth phase following the 2000
Point and Newington, adding much needed housing supply into the heart of Greater Sydney.
Olympics, with a growth spurt ranging from 63% to 138% in the three years following the event.
The transformation of the Homebush Bay region has created an residential and commercial hub with an annual economic output of 5 $ billion per year (Source: PWC, SOPA)
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Brisbane’s race to the Olympics
Sydney Median House Price
Quarter
Source: Real Estate Institute of Australia
Median House Price – Suburbs Around Sydney Olympic Park Concord West
West Ryde
Ermington
Annual
Source: Domain PriceFinder
Brisbane’s race to the Olympics
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The Sydney Olympic Park Master Plan 2030 will drive economic benefits 30 years after the 2000 games (Source
Fast-forward 21 years since the Sydney Games, it is clear that the economic benefit of an event like the Olympics is something that can endure for decades.
A more recent example of a major sporting event, and one that is closer to Brisbane, was the 2018 Commonwealth Games on the Gold Coast.
Prior to the Games, Sydney had no multi-purpose stadium. Now, Sydney Olympic Park boasts not just a stadium, but a broad range of sporting facilities allowing it to host other major events such the Rugby World Cup and the World Masters Games and reap the economic benefits from hosting other major events.
Despite being on a smaller scale to the Olympics, the preparations for the Commonwealth Games included $2.6 billion on upgrading the transport infrastructure in the City, in addition to the $657 million invested in sporting venues.
The Sydney Olympic Park precinct is now a major economic hub for Greater Sydney with an economic output that reached over $5 billion by 2018-19, with further growth and development in the works as part of the Sydney Olympic Park Master Plan 2030, which includes new transport infrastructure, housing, schools, and employment hubs to boost the number of local jobs to 34,000.
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Brisbane’s race to the Olympics
This provided a much needed boost to the local economy and the real estate market, which had slumped following the GFC. After the announcement in 2011, the property market entered a growth phase where the City’s median house price grew by 34% ($165,000) from 2011 to the event in 2018.
SOP
Median House Price – Gold Coast City
Quarter
Source: Domain PriceFinder
Projects like the Gold Coast Light Rail stage 2 were fast tracked to complete before the 2018 games (Source: QLD Government)
Brisbane’s race to the Olympics
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Sunshine Coast Zone
Brisbane Zone
Gold Coast Zone The three olympic zones hosting events in the 2032 Games (Source: Brisbane 2032 Master Plan) Like the Sydney Olympic event, the impact to the Gold Coast economy is expected to last far beyond the 12day period of the event through increased tourism, venue utilisation and exports. These past experiences of the 2000 Olympic Games and the 2018 Commonwealth Games provide an insight to the economic benefits of these major events, and thus the impact of the 2032 Olympic Games in Brisbane will likely develop over many years, or even decades. Research from KPMG, commissioned by the Queensland Government, assessed the potential economic benefit of the 2032 games, which included the 10-year period leading up to the Games, the Games event, and the 10 years post the Games (i.e. 2022 to 2042). The key findings of this report include: •
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Economic and social benefits of $8.10 billion for Queensland, which includes $4.6 billion from a games-induced uplift from international tourism and trade, and $3.5 billion in social benefits. Nationally, Australia is expected to reap a $17.61 billion economic benefit.
Brisbane’s race to the Olympics
•
The creation of 91,600 full-time equivalent jobs over the 20 year evaluation period (as a result of the new expenditures resulting from the Games, such as induced tourism and trade, event operations and infrastructure).
The 2032 Brisbane Olympic Master Plan will include 32 venues within South– East Queensland and located in three primary zones of Brisbane, Gold Coast, and the Sunshine Coast, which are all connected by established road and rail networks.
The Brisbane zone will be the location for 22 venues spread out in clusters all across the City: •
•
•
•
The River Cluster (covering the area between South Brisbane and Woolloongabba) will accommodate 4 venues, including the Brisbane Convention and Exhibition Centre, the South Bank Piazza, the South Bank Cultural Forecourt, and the Brisbane Cricket Ground at ‘The Gabba’, which will undergo a $1 billion upgrade to boost the capacity from 42,000 to 50,000. The Brisbane City Cluster will accommodate 2 venues, including a new $2 billion inner-city entertainment arena (Brisbane Live), and the Brisbane football stadium. The Herston Cluster will accommodate 4 venues, including the Brisbane Showgrounds, the Victoria Park Complex, Ballymore Stadium, and the new Brisbane Indoor Sports Centre. The Chandler Cluster, to the south east of Brisbane CBD, will accommodate 4 venues
including the Anna Meares Velodrome, the Brisbane Aquatic Centre, the Brisbane International Shooter Centre, and the Chandler Indoor Sports Centre which will receive an upgrade to boost its capacity from 2,700 to 10,000. •
The Olympic Village will be located in the 300 hectare Northshore Hamilton priority development area, next to the Royal Queensland Golf Club which will which host the golf competition.
•
Two venues will be located to the north of the city, at the Brisbane Entertainment Centre in Boondall, and the new Moreton Bay Indoor Sports Centre.
•
Three venues will be situated in Brisbane’s south and southwest, at the Queensland Tennis Centre, Lake Wyaralong in the Scenic Rim, and the new Ipswich Stadium in Greater Springfield.
The Brisbane City Cluster will accommodate 2 key venues, including the new inner- city Brisbane area (Brisba
Brisbane’s race to the Olympics
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Brisbane Indoor Sports Centre
A new indoor sports centre with a capacity of 12,000 will be built in the Herston cluster to host the Olymp basketball games and Paralympic sports. (Source: Brisbane 2032 Master Plan)
Chandler Indoor Sports Centre The Chandler Indoor Sports Centre will receive a major upgrade to boost capacity for the 2032 games. (Source: Brisbane 2032 Master Plan)
Olympic Village The Olympic Village at Hamilton, 6km north- east of Brisbane CBD. Source: (Brisbane 2032 Master Plan)
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Brisbane’s race to the Olympics
Redland Whitewater Centre
The new Redland Whitewater Centre will provide a range of aquatic recreational facilities for the 2032 Olymp
Moreton Bay Indoor Sports Centre The new Moreton Bay Indoor Sports Centre will provide a community sports hub after the Games. (Source: Brisbane 2032 Master Plan)
Ipswich Stadium
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The Gold Coast zone comprises 6 venues: •
•
The Broadbeach Cluster includes the Gold Coast Exhibition and Convention Centre, and the Broadbeach Park Stadium.
Southport, and the Coomera Indoor Sports Centre to the north of the City. •
Other venues around the Gold Coast include the Gold Coast Sports and Leisure Centre in Carrara, the Broadwater Parklands in
The Gold Coast Olympic village will be located within a new residential development at Robina, and will be next door to a venue at Robina Stadium.
Part of the legacy of the 2018 Commonwealth Games for the Gold Coast is the capability to host future even the 2032 Olympics. (Source: Brisbane 2032 Master Plan)
The
14
lympic
illage at
obina will be home to over
Brisbane’s race to the Olympics
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athletes and o
cials
Source:
risbane
The Sunshine Coast Zone will host 4 venues: •
The Kawana Precinct includes the Sunshine Coast Stadium and the Sunshine Coast Indoor Sports Centre, the Alexandra Headland Venue for cycling and kiteboarding competitions, and the Sunshine Coast Mountain Bike Centre.
•
The Sunshine Coast athletes village will be located in the new Maroochydore City Centre, which is a $2.5 billion project to transform a 53-hectare greenfield site in the heart of Maroochydore into a modern CBD.
•
Outside of the Brisbane, Gold Coast, and Sunshine Coast zones, events will held in Townsville, Toowoomba, and Cairns, and the two previous Olympic hosts of Sydney and Melbourne will host football preliminary and quarterfinal matches, enabling Australia-wide Olympic engagement.
The 2032 Brisbane Olympics will showcase to a global audience, the diverse and spectacular region of southeast Queensland, from its cities, beaches, and hinterlands, and will leave a legacy of new and upgraded facilities and sports infrastructure.
The Olympic Satellite Village for the Sunshine Coast will be located in the new Maroochydore City Centre (So Brisbane 2032 Master Plan)
Brisbane’s race to the Olympics
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Brisbane Airport’s (BNE) New Runway
•
A major infrastructure project to unlock a bottleneck at the core of Brisbane’s transport network with a new rail line and tunnel under Brisbane river and CBD.
•
Project investment: $1.3 bn, completed in 2020.
•
Provides Brisbane airport with the capacity for 110 aircraft movements per hour - comparable to the international airports of Singapore (SIN) and Hong Kong (HKG).
•
Will revitalise the precincts around the new underground stations at Roma Street, Albert Street, Woolloongabba, and Boggo Road.
Create 7,800 new jobs and $5 bn in annual economic benefit by 2035.
•
Will integrate with other transport networks across South East Queensland, including the new Brisbane metro, to provide higher capacity and more frequent services.
•
Will support other rail network projects linking the city to the Sunshine Coast, Ripley, and Flagstone.
•
Brisbane Metro • •
•
Project investment: $944 million, planned completion in 2023. A key component of the Greater Brisbane’s future transport network, linking the CBD with the suburbs. Will reduce congestion bottlenecks to the current transport network that has reached full capacity due to the growth of the City.
Queen’s Wharf Brisbane •
Project investment: $3.6 billion, planned completion in 2022.
•
A new world-class integrated resort that will set Brisbane as a global destination for tourism, leisure and entertainment.
•
Will create 8,000 jobs once fully operational, and attract an additional 1.39 million tourists each year.
Cross River Rail •
Project investment: $5.4 billion, planned completion in 2025.
The Cross River Rail will allow more trains to run more often, and will integrate with new roads and new bus to enable a turn-up- and-go public transport system across the whole of South East Queensland. (Source: Brisbane City Council)
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Brisbane’s race to the Olympics
Brisbane’s new runway will double BNEs passenger capacity from 23 million to 50 million by 2035, and provid
The Queens Wharf precinct will transform a previously underutilised part of Brisbane City by blending repur heritage buildings with contemporary architecture to create an entertainment and lifestyle hub. (Source: Destination Brisbane Consortium)
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With the significant infrastructure investments already underway, and a major sporting event that will spur further investment in the years to come, property investors should consider that now is the best time to act.
Another way to observe this phenomenon is to look at the Brisbane median house price as a percentage ratio of the Sydney median house price. The 41-year average of Brisbane’s median house price vs Sydney’s median house price is 58%.
As it stands today, the Brisbane real estate market is the most undervalued it has been in over four decades.
When the price gap becomes too large, to the point where Brisbane’s median house price drops to 40% of Sydney median house price (i.e. highly undervalued), the Brisbane real estate market enters a growth phase.
Comparing the Brisbane median house price to Sydney, we can see that over the last 40 years there have been multiple instances where the price gap between Brisbane and Sydney has widened. What’s interesting is that every time the price gap becomes too large, the Brisbane real estate market goes into a growth phase.
Historical Growth Phases
This phenomenon has occurred three times in the last 40 years, with the time frames and growth rates shown in the table below:
Consecutive quarters of growth
Avg. quarterly growth rate
Avg. annual growth rate
Total growth over phase
A (Jun ‘80 to Jun ‘82)
8
6.0%
26.0%
58.8%
B (Dec ‘87 to Jun ‘90)
10
5.2%
22.4%
65.7%
C (Dec ‘00 to Jun ‘04)
14
5.2%
5.2%
102.6%
Brisbane House Prices & Growth Rates vs Sydney Quarterly change in house price of Brisbane (LHS)
Brisbane House Price vs Sydney (RHS)
Quarterly
Source: Real Estate Institute of Australia (REIA)
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Brisbane’s race to the Olympics
Median House Prices – Sydney vs Brisbane Sydney
Brisbane
Quarterly
Source: Real Estate Institute of Australia (REIA)
The consistency of the growth rates in each of the previous growth phases is remarkable. In all three cases the average growth rates were consistently around 5%–6% per quarter (or around 22%–26% average annual growth), however, the main difference is the consecutive growth phases got progressively longer, yielding a higher total growth return.
More recently in September 2000, when the median Brisbane house price reached 46% of the median Sydney house price (one of the widest price gaps in a 40-year history), the Brisbane median house price grew at 5.2% for 14 consecutive quarters achieving a total growth of 102.6%, or a doubling in price, in around 4 ½ years.
For example, in May 1980 when the median Brisbane house price reached 50% of the median Sydney house price, the Brisbane median house price grew at an average of 6.0% per quarter for eight consecutive quarters, resulting in a total growth of 58.8% during that growth phase.
As it stands today in 2021, the Brisbane real estate market is primed for a new growth phase, and there is a strong case to be made that the next growth phase will be stronger and larger than previous phases.
Brisbane’s race to the Olympics
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Another factor is the increased internal migration, with the net interstate migration to Queensland rising since the start of 2014 and a large surge of net migration since the start of 2020. In terms of the real estate market indicators, the total stock on market has been declining since the start of 2019, and is currently at a 10-year low. Total property listings are now sitting at 18% below the 10year average, indicating that the market is in a state of under-supply. In the rental housing market, the indicators show a market that is also in a critical shortage of supply. The vacancy rates have been trending lower since the start of 2017, and is currently sitting at a 10-year low at
1.3%, which is 1.2 percentage points below the 10-year average, and 1.7 percentage points lower than the 3.0% vacancy rate which is considered a balanced market. Extremely low vacancy rates put strong upward pressure on rents, and the weekly rents in Brisbane have surged since mid-2020, and are currently up 9% year-on-year. Increasing rents boost rental yields, which creates further demand for rental housing stock. The latest data from CoreLogic confirms that Queensland has already entered a growth phase, with the dwelling values in Brisbane up 15.9% over the last 12 months, and dwelling values outside of Brisbane (‘Regional QLD’) up 19.0% over the last year.
Net Interstate Migration to Queensland Interstate movers to QLD
Source: Net interstate migration, ABS
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Brisbane’s race to the Olympics
Total Stock on Market in Brisbane Stock on market
10-year avg.
Source: SQM Research
Vacancy Rates – Brisbane Vacancy Rate
10-year avg.
Balanced rental market (3%)
Month
Source: SQM Research
Brisbane’s race to the Olympics
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Weekly Rents – Brisbane Weekly Rents for Houses
10-year avg.
Month
Source: SQM Research
Annual Dwelling Value Growth Rates – Queensland Regional QLD
Brisbane
Month
Source: CoreLogic Dwelling Value Index
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Brisbane’s race to the Olympics
Like a handful of other locations across Australia, Brisbane showed remarkable resilience during 2020, with changes in dwelling values remaining in positive territory throughout the year before recording a notable upswing from the end of 2020 and onward. Now, with the upcoming Olympic games and the future investment that will occur in preparation for the event, we will only see a further increase in demand for housing in Brisbane and surrounds. Additionally, when a declining housing supply is added to the equation, the market in this region will be primed for a period of strong price growth. To discover which areas and suburbs will benefit the most, you need access to the most current and detailed data-analysis, taking into account the main contributing macro-economic factors and out-looks.
Our members at Freedom Property Investors enjoy all the latest data and property analysis which enables them to make informed investment decisions. Infact, our track-record in uncovering areas of high capital growth and excellent rental yields is the envy of investment advisors across the country. Whether you’re actively building your portfolio or just getting started, our team will help you identify the opportunities that match your goals.
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