6 min read
Posted on September 2nd, 2021
I joined the property industry in 1999, just a year before the Sydney 2000 Olympic games.
The funny thing is that sentiment at the time was very negative; Barcelona and Montreal were cited as key examples of how a property market crash would inevitably follow the Sydney Olympic Games.
I remember very clearly the front page of one the newspapers at the time, which stated:
“After the Sydney Olympics, property prices will drop 20% – no suburb excepted”
People were buying into the doom and gloom; and I experienced this first-hand. I knew a couple who owned a house in the Sydney suburb of Croydon. They were influenced by all the negative headlines and sentiment and sentiment and decided to sell their house before the Olympics.
But the markets proved them wrong.
In the previous Sydney market peak between 1987-89, median property values in Sydney doubled. In the several years to follow, prices went nowhere, but now the Sydney market was starting to move. In fact, between 1998 and 2003, the Sydney market more than doubled. And over the full cycle, from 1991- 2003, Sydney median property values skyrocketed, going from circa $178,000 to $520,000.
Today, the median house price is over $1.2 million, as we know.
North Bondi duplex bought for $1.41 million during Sydney Olympic games today listed with guide of $16 million | Source: REA
The Sydney Olympic Games were a true catalyst to putting the city on the world map. In the years leading up to the Olympics, there had been so much infrastructure investment into the city: including roads, transport, the new Olympic park, relevant suburbs and more.
When money is spent in a city, what usually follows is more jobs, more people, more housing demand, and property growth. And that’s what happened: the market went through the roof!
I invested heavily in Sydney property during those years and benefited from the boom. The equity I gained in those properties, helped me to continue investing in Sydney in the years ahead.
The benefits to Sydney continued post-games, of course. In the years following, many more international tourists came to Sydney; the city is now in many ways the ‘crown jewel’ city of the southern hemisphere.
And now, we are excited to see another major Australian capital city – Brisbane – follow in Sydney’s footsteps.
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Brisbane Olympics – “building a new city”
Those who have been following Brisbane’s growth and development will know that Brisbane has long since shed its old image of a ‘big country town.’
Brisbane is growing, and as an Olympic host, we will see Brisbane established as a genuine global city. This is not just a win for Brisbane, either. The South East Queensland region (Brisbane, Gold Coast and Sunshine Coast) will be the centre of Olympic activities, investment and global attention.
In the last two decades the government has been investing heavily in developing Brisbane infrastructure. Unlike Sydney, where the population growth came first, and the infrastructure plays catch-up, Brisbane has been planned strategically over the last two decades, with even more infrastructure and development fast-tracked to meet the 2032 deadline.
As Daniel Gschwind, of Queensland Tourism Industry Council said recently, “We are not building something for a three-week sports party, but building a new city.”
Brisbane Airport recently opened its 2nd Runway; a 24-hour hour gateway into the city, which will enable overseas tourists to fly directly into Brisbane, bypassing Sydney or Melbourne altogether. There is the new Queen’s Wharf Casino, which is not just a casino, but a destination precinct that includes many fine dining restaurants and 5-6 star hotels.
The Queensland Government claims the Olympics will generate $20.2 billion in international visitor expenditure from now until 2036, along with increased export opportunities of up to $8.6 billion.
The tourism industry is understandably excited; “An Olympic city is the ultimate marketing coup,” Accor Hotels Australia Chief Executive told AFR this month. “You can’t buy better publicity. When you think how well Australia is positioned to exit the pandemic in terms of being seen by the world as a large, safe island that’s relatively COVID-free by the time the 2032 Olympics rolls around, we’ll be set to capitalise on global travel hunger.”
While international appeal will grow, with its sub-tropical climate, relaxed lifestyle and affordability; in recent years, Brisbane and South East Queensland have seen many Sydney and Melbourne residents migrate north in recent years, as property prices became too expensive in the biggest capital cities.
Sydney and Melbourne property markets tend to run in parallel, with Brisbane usually next to follow. While Sydney and Melbourne markets were in full swing, Brisbane’s market remained flat for a number of years, but now the Brisbane market is moving. Brisbane’s turn is next, and we are already seeing this, with Westpac predicting 26% price growth for Brisbane housing between 2021-22.
With today’s supply and demand coupled with the 2032 Olympics, I can only think that capital growth will be strong over the next 10 years and beyond.
We are very excited for Ironfish investors, as we have placed many into some of the most desirable locations (and many award-winning developments) in Brisbane and the Gold Coast, at a fraction of typical east coast capital city prices.
I, myself, have a very substantial portfolio in Brisbane and South East Queensland, so I’m also very excited from a personal perspective as well!
While our investors who got in early will benefit the most from the predicted growth of the next 10+ years, there is still great potential for the Brisbane market for new investors.
If you need some help exploring options or understanding how to invest in Brisbane’s best locations, please reach out to your local Ironfish strategist. We are specialists in this market and are all looking forward with excitement to see how this market develops to 2032.
Go Brisbane!
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