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Adelaide’s The Advertiser Saturday March 3, 2012
BUILDING UP FOR A BOOM By: Anthony Keane
At last here’s something positive for punch-drunk property investors and owners to read. Despite statistics showing our worst fall in house prices in decades and the recent partial reversal of last year’s interest rate cuts, there’s finally something to look forward to.
Last week I went to a briefing by Adelaide’s property professor Peter Kouliizos and walked away with a big smile.
The University lecturer, author and investor is quick to point out he’s not a real estate agent and has no apartments not other products to sell so he’s independent and can tell it like it is.
Firstly, he believes the current downturn will get a little worse in the months ahead. But after that, it’ party time – thanks to the massive Olympic Dam mining project and a host of other resources projects planned for the state.
“I truly believe I’m going to witness the best property boom in Adelaide that I have seen in my lifetime,” Mr Koulizos said. “The thing that will drive property is people with money, and the mining industry tends to pay higher wages.
“Investing in Adelaide today is a bit like being able to go back in time and invest in Perth 10 years ago.” Years ago the two cities had comparable house prices but Perth has since soared to become one of the most expensive cities in the nation.“I was teaching in Perth during the boom. I can see history repeating itself and we are in for a great time.” Mr Koulizos said.
“I do think property prices will be better by the end of this year than they are now.”
Mr Koulizos, author of The Property Professor’s Top Australian Suburbs, believes the mining boom will make several suburbs between the airport and the city good for capital growth potential. He also likes Port Noarlunga, Christies Beach, Ethelton, Exeter, Glanville and Kensington. “As the cheapest capital city in mainland Australia, there’s a lot of focus on Adelaide,” he said.
He warned property investors trying to time the boom to make a note when prices start climbing sharply. “I’ve never seen a property boom go longer than three years so pencil it in,” he said.
Of course, hearing these comments like I did doesn’t mean you should rush out and buy real estate without your own research.
It’s just one view – and a welcome positive one – but its balanced out by many of the negative views about property and investment generally.
However, it does illustrate that things are not always gloomy and that real estate – as with all investments – moves in cycles.
Whenever the next positive property cycle begins, it will reward you handsomely if you’re ready for it.
• Peter Koulizos, university lecturer, author and property advocate.