Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyers agents, offices in Brisbane (Riverside) & Sydney (Martin Place) - clients include hedge funds, resi funds & private investors.

4 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the better property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete Wargent is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the bestsellers 'End Game' and 'Code Red'.

"Pete's daily analysis is unputdownable" - Dr. Chris Caton, Chief Economist, BT Financial.

Invest in Sydney/Brisbane property markets, or for media/public speaking requests, email pete@allenwargent.com

Tuesday, 24 January 2017

Lending finance jumps to 9-year high

Lending bites

There was a 14.8 per cent seasonally adjusted jump in commercial finance in the month of November, taking commercial finance up to 5.9 per cent higher than a year ago. 

Property investment loans were a key driver of the increase, although housing finance for owner-occupiers was flat in the month.

Click on the charts to expand them, as always! 



Piecing it all together lending finance spiked 9.8 per cent higher in November, following a 0.6 per cent rise in October. 

All up, then, total lending finance jumped to $76.3 billion, the strongest monthly result since 2007 and the third strongest month on record.

In trend terms, total lending finance is now just a fraction below the highs recorded in 2015. 


There has been a small rebound in commercial lending to the mining industry since September, supported by the commodity prices surge, while the construction, storage, and transport sectors have seen moderate increases. 


Animal spirits?

Business seem to be making some use of low rates, with the economy and full-time hiring apparently picking up a bit of pace again into the end of 2016, following a soggy patch.

It very much looks as though interest rates will be on hold for a long while to come now, but Wednesday's inflation figures will be watched closely as always. 

Monday, 23 January 2017

NSW investors blow the doors off

Sydney investors return

November's Lending Finance figures revealed a considerably improved month for commercial loans, with a 14.8 per cent increase in commercial finance. 

Personal finance also increased by 6.4 per cent, while lease finance was up 3.1 per cent.

So it was a much improved month for lending overall.

By far the most striking trend, however, was the return of property investors to Melbourne, and especially Sydney.

Investor loans were 23 per cent higher than in November 2015 in Victoria, with investor lending having been hindered by macroprudential regulatory measures in the preceding year.

In New South Wales the value of loans was fully 40 per cent higher than in the prior corresponding period, confirming suspicions that parts of the Sydney property market were off to the races again at the end of calendar year 2016.


At the other end of the spectrum, the value of investor loans in resources state of Western Australia was down by 13 per cent year-on-year.

Mortgage arrears are also likely to show further increases in the Northern Territory, with dwelling prices in decline and elevated vacancy rates.


Note that the figures for the value of loans written are not adjusted for population growth.

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The all-important inflation figures will be released on Wednesday morning.

Market consensus for core inflation is 0.5 per cent for the quarter and just 1.6 per cent annualised, well under the 2 to 3 per cent target range.

Headline inflation could come in a bit higher, with market consensus of 0.7 per cent (from a range of 0.3 to 1 per cent).

This will be the most important domestic release of the week.

In June the annual rate of inflation was the lowest seen since 1999 at just 1.3 per cent.

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Real Estate Talk

Catch me on this week's Real Estate Talk show here (or click the image below).

Sunday, 22 January 2017

New housing finance topping out

Topping out

I recently wrote here how it looked as though new home finance had shaped into quite a neat double top formation.

In November, finance for new owner-occupier purchases increased a bit, but overall the trendline does suggest that a second peak is forming. 


The slight rebound ties in with the rebound in new home sales in the month, previously noted here.

Mainly investors buying new

It's often said that investors mainly invest in established housing, with charts produced to prove it.

Of course, with the total dwelling stock only increasing by less than 2 per cent over the year to September 2016 to 9.76 million, it stands to reason that most investors will buy established - there just aren't that many new properties in any given year. 

I have been more interested to know what percentage of the new housing stock was purchased by owner-occupiers, but nobody I have asked seems to know (or even care about) the answer.

The housing finance figures show that owner-occupiers financed the construction of only 68,200 homes and the purchase of just 31,490 dwellings. 

What the housing finance figures don't capture is that some owner-occupier buyers of new homes are cash buyers.

But nevertheless, it's clear that largely the buyers of new dwellings are investors, albeit many of them from overseas.

Saturday, 21 January 2017

Weekend reads: Must see articles of the week

Summarised for you here at Property Update (or click the image below).


It was particularly noteworthy that New South Wales land values have now increased to $1.5 trillion.

You can subscribe for the free Property Update newsletter here.

Serviceability

Serviceability improved

CoreLogic released its Housing Affordability report for December 2016.

The ANU in Canberra supplied household income figures, derived from the Census and ABS State National Accounts data at the regional level. 

It showed that on the one hand, the deposit hurdle has increased. 

On the other hand, mortgage serviceability has improved across the board since before the financial crisis, thanks to lower interest rates. 


Source: CoreLogic

Note Perth, Brisbane, and Darwin, where serviceability levels have improved dramatically.

You can find the full report here.