Expert in Focus - Dr Sam Tsiaplias

Australian Property Investor Magazine this week sat down for a virtual coffee with leading Melbourne academic, Sam Tsiaplias, a senior research fellow in the Macroeconomics Research Program at the Melbourne Institute of Applied Economic and Social Research.

His research interests are in the areas of applied macroeconomics, housing and household behaviour, and financial economics.

Dr Tsiaplias has also consulted to many government agencies and private sector organisations in relation to the Australian energy market, retail sector, the Victorian criminal justice sphere, the banking sector and the Australian housing market.

We sought his views on everything from negative interest rates and quantitative easing, to what he wanted to be when he was growing up.

API: Your field of study is quite diverse, from mathematics to housing, and you’ve gone on to earn a doctorate. What was your initial undergraduate degree and your subsequent academic progress?

Sam Tsiaplias: My initial degree was a double degree in Law and Commerce, with honours. I enjoyed the commerce aspect of it more and went on to work at ANZ Bank before moving to a doctorate in Economics.

API: When you were a kid/young teen (where was that?), did you want to be a train driver, pilot, sports star or Senior Research Fellow in the Macroeconomics Research Program at the Melbourne Institute of Applied Economic and Social Research?!

Dr Tsiaplias: I was born and raised in Melbourne. I enjoyed writing and I guess if I had to pick – I would say I wanted to be an author of sorts. What I am currently doing is related to that, as it involves a significant amount of writing and analysis. 

API: What has been your role in regard to consulting with government and the private sector on the subject of the Australian housing market.

Dr Tsiaplias: I have undertaken a significant amount of research (academic and otherwise) on the Australian housing market. As a result, I have had the opportunity to consult with both government and the private sector on matters such as housing affordability, housing market reforms, house price modelling, and examining regional differences in Australian housing markets. 

API: The property market in most segments has declined, even if marginally in some markets, since the onset of the corona virus pandemic. What do see happening over the next six-12 months, assuming there is no second wave of infections and subsequent lockdown measures?

Dr Tsiaplias: I suspect we will first see a decline in rental rates, particularly in Melbourne and Sydney where the decline has already started. This will be probably be followed by a fall in prices. However, I don’t think the price falls will be as large as some forecasters are predicting and this is primarily due to the combined effects of low interest rates and fiscal stimulus.

API: In the abstract of a paper you wrote this year, you said, “To date, record low Australian interest rates have been associated with additional housing‐related debt and asset price appreciation.” What role do you see interest rates and the RBA playing in the year or more ahead and could we see negative interest rates?

Dr Tsiaplias: I think interest rates are about as low as they are going to get. The appreciation we saw last year stemming from lower rates will be offset by weaker economic conditions in the short term. The impact of low interest rates will probably be to curb the size of any future price falls. 

API: The turmoil of recent months, printing of money (quantitative easing), questionable corporate yields and record stock market levels prior to and since the pandemic have led some to question the underlying fundamentals of economic theory. Has the teaching of economics had to adjust or evolve in the wake of the latest developments or do the essentials of economics curriculums remain unchanged?

Dr Tsiaplias: COVID-19 will no doubt generate significant new research into the economic ramifications of health-related crises. In terms of the economics underpinning fiscal stimulus, the prevailing view is that fiscal stimulus makes sense during severe downturns. The reason for this is that, in the absence of meaningful stimulus, economic conditions would be significantly worse. Stock markets are operating under the assumption of a relatively quick recovery from the COVID-19 crisis. If this doesn’t happen, a sharp correction will take place. 

API: How seriously is the travel ban impacting universities and, by extension, the student housing market and rental market?

Dr Tsiaplias:  The travel bans will have a significant negative impact on both universities and student housing. This will persist into next year, leading to higher vacancies for inner city rentals.

API: What do you most enjoy and dislike about living in Melbourne? 

Dr Tsiaplias:  Great coffee, but I dislike the traffic!