Property Investing in Brisbane. Is this a Hype or Trend?

Historically the Brisbane property market has always been a step or two behind the major Sydney and Melbourne property markets. Brisbane has always been seen as the more affordable city, as compared to Sydney and Melbourne. Investors tend to invest in Brisbane only when they are outpriced in Melbourne and Sydney.

Lately, there have been a lot of interest in the Brisbane property market recently but is this a hype? Or is this going to be a long term, sustainable trend?

Why are Investors Investing in Brisbane Properties?

Let's take a step back and look at Brisbane. Investor have always been looking for a reason to buy into Brisbane. Traditionally, investors invest in Brisbane only when they are outpriced in the Melbourne and Sydney market and they do not see value in both Melbourne and Sydney. For now, property buyers are buying into the Brisbane market for 2 main reasons:

1. People trying to get away from pandemic-hit states; and

2. The 2032 Olympic.

Affordability used to be cited as a reason, but this "affordability" is always relative, and this is always in comparison with the Sydney and Melbourne markets.

What's going to happen in the coming years?

2021 COVID-19 Pandemic

Since 2020, property investors have been buying into Brisbane to get away from the frequently-locked-down Melbourne and Sydney.

As Victoria and Sydney opens up in coming weeks, Brisbane will have no choice but to open up eventually. It cannot be locked up forever. Let's give Brisbane 3 to 6 months.

Most employers ar using the ability to work remotely to live in more affordable places while still getting Sydney and Melbourne salary rates. When Sydney and Melbourne opens up and businesses and offices starts to reopen, can people still "work from home"? Remember, many employees are currently "working from home", and many have used this opportunity to move further out into lower cost regional areas and Brisbane.

Will workers start flying in and out of Brisbane, and back into Sydney and Melbourne daily? Maybe, but highly unlikely.

People will want to start moving back to where their jobs are, or leave their current jobs and start looking for work locally in Brisbane. Is the Brisbane economy big enough to accommodate them? Probably. Probably not. And what's going to happen to the properties? Many will want to convert them into investment properties, and move back into Melbourne or Sydney.

Vacancy rates in Brisbane will increase. Yield goes down, and when yield goes down, property prices will be affected.

So, just by looking at the pandemic influenced trend, Brisbane property prices will start to slow in 6 to 9 months, assuming no other factors.

2032 Brisbane Olympics

A second reason for Brisbane is, buyers buying and investing in the Brisbane property market in anticipation of the Olympics influenced property boom.

Yes, there will be more demand for properties leading up to the Olympics, and there is going to be more infrastructure investments in Brisbane, in preparation for the Olympics. This demand is going to be temporary, in the few months leading up to the Olympics for the Olympics officials, visitors, and athletes and their family and friends.

What's going to happen after the 2032 Brisbane Olympics, is anybody's guess. However, if we look at the Sydney Olympics and everywhere else in the world, property prices actually fell, AFTER the Olympics. This is primarily due to the fact that new accommodations for the Olympics visitors will instantly flood the market. There is going to be an instant oversupply of properties in the Brisbane property market after the event, as visitors and temporary workers leave. Sadly, it is typical for property prices to fall an oversupply situation.

What does this mean for Brisbane in the next 10 years?

Assuming no other factors, and if we overlay these 2 factors together, we'll see property prices continue to grow, up to mid 2022. It is likely to slow or fall, for a year or 2 before interests picks up again. But this interest will only be limited to the Olympic development areas though.

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