The Commonwealth Games may prove the elixir of life for the Gold Coast’s feeble property market, but whether the effects will be felt by the local population as a whole, or merely a select view housing prospectors, is up for debate.
Using information garnered before, during and after the 2000 Sydney Olympic Games, Residex founder and analyst, John Edwards said there’s significant evidence to show that major international sporting events have a positive impact on local housing markets, if only temporarily.
Before the Sydney Games were announced, Edwards said around 64% of the suburbs in the Olympic Corridor outperformed the median growth rate for Sydney, with waterfront established suburbs performing best.
However, he said that once the games were announced and development of the precinct got underway, the position changed very quickly and all but a very small handful of suburbs failed to grow rapidly and outdo Sydney generally.
“The majority of higher growth rates occurred in the first one to three years. The relationship between these suburbs and the Sydney median has changed forever.”
Yet, almost all suburbs for a period of two years after 2002 failed to perform – and, in fact, under-performed – Sydney as a whole, which he argues is likely the result of overpricing in the lead-up to the Games.
Regardless, he said there can be ‘little argument’ that the Olympic Games were anything but a ‘significant’ benefit to home owners in the area surrounding the event.
But Gold Coast broker, Rebekah Gould, said she’s worried that any positive impact the Commonwealth Games may have on the local housing market will primarily be felt by prospectors uninterested in long-term investment.
“My initial reaction when I heard the Games were coming to the Coast was I couldn't see it making a huge impact on property values, as we are already a transient population with our economy based on tourism. So, the Games will be great for our economy and anyone in the tourism industry, but not so much for the locals who live here who aren't.”
Gould said many of her clients are tradies who have been forced to enter the mining industry on a fly in/fly out basis, due to lack of local job prospects.
“I can't see the Games improving things sufficiently for them to be able to give up that income and rely on local employment. There could possibly be a small increase in activity from investors hoping to pick up some capital gain and good rental yields during the Game period, but I’m not sure if it will be anything more than that.”
Edwards said units are more likely to serve as rental properties for the games and are probably the most solid investment.
“If I were to take a guess, the answer would be to go off and buy old rundown blocks of flats, sit on them for a few years, remodelling them and rent them out during the games and sell immediately following the completion of the Games.”
However, Edwards warns that there are significant differences between Sydney and the Gold Coast and said the effects of the Commonwealth Games are likely to be more subdued.
“Given the above points, it is important to note that the Gold Coast is already very developed with reasonably good infrastructure. This suggests there is little the Commonwealth Games can add to the city, other than increased tourism exposure.”
He said that, while the Gold Coast boasts good air access, a good road system and general amenities, its rail services are ‘poor’- and that, he said, is an area where the Commonwealth Games may have a positive impact.
“All of the above leads me to the view that we cannot expect the same level of benefit for property owners as we saw from the 2000 Sydney Olympic Games. Benefits will more likely come via an economic boost via a surge in tourism before the Games and for some time after.”
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