Olympic Games: 'poorly spent money' delivers property price spikes
Whether regarded as a wise or woeful use of public money, the Olympic Games of this millennium have generally delivered higher property prices for host cities and Brisbane is likely no exception.
Let me state from they get go, that I believe that hosting events like the Commonwealth Games, and especially the Olympics, is money poorly spent.
Despite the spruiking, there is little real evidence that the investment delivers a lasting positive impact, particularly when it comes to branding, sporting participation and improved infrastructure.
The vast sums of money would be far more effectively invested if it went towards housing, health, urban infrastructure and TAFE education.
That caveat aside, it is worth noting that hosting the Olympic Games can have a positive impact on the residential property market.
Importantly, however, that varies depending on a number of factors, such as the host city's existing infrastructure, the state of the local property market, and the long-term sustainability of the new facilities and infrastructure built for the games.
Some past host cities have seen an increase in dwelling prices leading up to the games.
A history of the Olympics and property prices
Here is an overview of how various Olympic host city property markets performed in the lead-up to, and around, the events:
• Sydney, Australia (2000): The housing market experienced a significant boost in the lead up to the 2000 Summer Olympics. Dwelling values rose by around 20 per cent between 1998 and 2000, driven in part by increased demand from international buyers and the construction of new infrastructure for the games.
• Athens, Greece (2004): The Athens housing market experienced a surge in prices leading up to the 2004 Summer Olympics, yet prices dropped significantly following the Games. Many of the new facilities and much of the infrastructure built for the Olympics were not sustainable in the long term, leading to a decline in demand for housing in the area.
• Beijing, China (2008): It has been reported that these Olympics had a significant impact on local property values. Before the Olympics, there was a surge in construction and infrastructure development, including the construction of new buildings, roads, and public transportation systems. This development led to a rise in property values in the areas around the Olympic venues, particularly in the central business district and in the neighbourhoods near the Olympic Village.
• London, United Kingdom (2012): The housing market in London saw a modest boost in prices leading up to the 2012 Summer Olympics, driven in part by the construction of new infrastructure and the increased international attention on the city. However, the impact on house prices was relatively small (often cited as between 5 and 10 per cent) and somewhat short-lived.
• Rio de Janeiro, Brazil (2016): The impact of the 2016 Brazil Olympics on local property values was more mixed than others over the past couple of decades. In the years leading up to the Olympics, there was significant investment in infrastructure and urban development in the main host city, which resulted in an increase in property values in some areas. However, the Brazilian economy was in a downturn at the time of the Olympics, which limited the potential for property value growth. Additionally, these Games were held during a period of political instability and social unrest in Brazil, which dampened enthusiasm for investment in the country.
• Tokyo, Japan (2021): The impact of the 2021 Tokyo Olympics on local property values is still being assessed, as the Games finished relatively recently and the market was negatively impacted by the Covid pandemic. There are some early indications that the event had a positive impact on local property values. Prior to the Olympics, there was significant investment in transportation systems, such as a new high-speed train line and the expansion of existing train lines, making some neighbourhoods more accessible and desirable for homebuyers and investors. The construction of new hotels and other tourist facilities have also created new investment opportunities.
In summary, and all things being equal, Queensland’s hosting of the 2032 Olympics could have a positive impact on Brisbane dwelling values and that impact could be as high as 10 to 15 per cent.