Peter Koulizos is one of Australia’s most respected lecturers on property valuation and property economics, he not only has personal investment experience but also holds a teaching degree, Graduate Diploma in Property and Masters of Business (Property). Peter lectures for Tafe South Australia, University South Australia and also in the Property Investment course for Property Planning Australia.
He is the Author of the most comprehensive book on Suburb’s in Australia and also a comprehensive comparison between Property and Shares. Jason Penna recently had the opportunity to ask Peter some key questions pertaining to his forecasts for property in 2015.
1) Peter, you are the author of two excellent investment books, Top Australian Suburbs and Property vs Shares, can you tell us a little about each of the books and how investors can use them to help with their investment decisions.
“With more than 3000 suburbs in our capital cities, there are many choices” – Peter Koulizos
Top Australian Suburbs – With more than 3000 suburbs in our capital cities, there are many choices when it comes to selecting the best location in which to buy property. The Property Professor’s Top Australian Suburbs has been written to help both homebuyers and property investors with their buying decision by detailing suburbs that are forecast to do well. Buying property in up-and-coming suburbs can give investors and homebuyers the opportunity to accelerate their wealth creation.
Property vs Shares – Many books deal with property or shares but this is one comprehensive book that covers both property and share investment. The book is intended to serve as a reference guide to potential and existing investors in each asset class. This book dispels the myths and helps investors learn the facts, benefits, risks and much more of each of these investments.
It answers the questions;
Is one kind of investment better than the other? Does one provide more capital growth? Is one better for income? You will have to read the book to find out!
2) You are continually researching property markets around Australia helping to find the areas that offer the most value, can you talk a little about what you look for when you are comparing suburbs and states to find these hidden gems.
“The major driver of capital growth is location” – Peter Koulizos
The suburbs selected in the Top Australian Suburbs book have been included using a number of criteria. They must
• Have potential for good capital growth.
• Have a reasonable median house price (general equal to or below the median house price of its respective capital city).
• Be undervalued.
The major (but not only) driver of capital growth is location. I look for reasonably priced, undervalued suburbs close to the CBD and the sea. Many of the suburbs detailed in the book are also undergoing gentrification and have a high percentage of period style homes. Buying in suburbs that are undergoing gentrification can provide a great boost to investor’s wealth creation.
3) 2014 was a relatively good year for property in Australia with most areas having at least some growth and interest rates remained low, what are your thoughts on a macro scale for the Australian Property Market for 2015?
“If unemployment falls 2015 will be another good year for property owners” – Peter Koulizos
2014 was a good year for most home owners. Some home owners had very big smiles on their faces as their properties increased markedly. This is especially true in our two largest cities, Sydney and Melbourne.
Sydney was the best performing capital city in 2014, just as it was in 2013. Is this as good as it gets for Sydney property owners? Only time will tell but I can’t see Sydney experiencing another bumper year in 2015. At the other end of the scale we have Perth which is the only capital city that experienced a decline in house prices in 2014. I fear that as iron ore prices continue to fall, so will Perth property prices. It was the mining of iron ore that was the catalyst for Perth property price increases last decade and it will be an oversupply of iron ore that keeps Perth property prices down in 2015.
So, what else can we expect in 2015?
Compared to the rest of the world, Australia’s economy is looking pretty good. Unemployment is just above 6% and according to the RBA, and is forecast to fall in 2015. Inflation is under control and the great news for mortgage holders, interest rates are still at historical lows. If unemployment falls and interest rates stay relatively low, 2015 will be another good year for property owners.
4) With more and more people starting to use their Self-Managed Super Funds (SMSF) to purchase investment property what are your thoughts on this strategy and do you see any long term positives or negatives?
“It is critical that investors realise SMSF’s are set up for retirement” – Peter Koulizos
Buying property in a SMSF can be very beneficial. They are taxed at a very low rate, 15%. Capital gains are taxed at an even lower rate, 10%. They also provide asset protection. However there are a number of considerations. One of the important considerations is retirement. It is critical that investors realise SMSF’s are set up for retirement. They are not meant to be used for making short-term profits that are spent before your retire. Owning property in a SMSF is a complex area and I’d strongly recommend investors obtain advice from an accountant and financial planner before they purchase property in a SMSF.
5) Going into 2015, are there any suburbs / towns you consider to be good value at the moment or are there any large infrastructure developments, schools etc you think might present an opportunity for investors?
“Opportunities will be in major cities yet to experience huge growth” – Peter Koulizos
There will be opportunities to make money in many areas around Australia but the best prospects will be in the major cities that have yet to experience huge growth, namely Adelaide and Brisbane.
My top picks for 2015 are:
Adelaide: Christies Beach, Port Noarlunga, Torrensville
Brisbane: Brighton, Sandgate, Margate
For those that hope the good times continue in Sydney and Melbourne into 2015, keep an eye on St Peters and Tempe (Sydney) and Flemington in Melbourne.
6) If our readers would like to connect or follow your movements, what is the best way for them to reach out? Facebook? Linkedin? Twitter?
If people would like to keep up to date with what is happening in the property market, they can follow me on Facebook, Linkedin or Twitter. Details are below.
Facebook – The Property Professor
Linkedin – Peter Koulizos
Twitter – @PeterKoulizos
DISCLAIMER: Information here is for general use only and should not be relied upon. One should see an accountant/financial advisor for their own personal circumstances which will be unique to their circumstances, please refer to our full legal disclaimer for more details.