Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), and CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

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 New York Times bestsellers 'End Game' and 'Code Red'.

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

Wednesday, 22 April 2015

Slowest rental growth since September 2005

Rental growth slows

One of the more interesting sub-components of today's inflation figures from the ABS is the rents index.

It showed that nationally rental growth slowed from an annual 2.4 per cent gain to just 2.1 per cent in March 2015.

This is the slowest rate of rental growth seen in nearly a full decade since September 2005.

It represents a sign that record high dwelling commencements in 2014 are beginning to pull back rental growth exactly as they should.


Resources investment boom over

The impact of slowing rents is to be felt more keenly in resources regions, particularly Perth, Darwin, and a significant number of regional towns.

Perth has seen its annual rate of rental growth slow to just +0.1 per cent, and this figure will almost certainly flip into negative territory over the forthcoming June quarter, for the first time in the couple of decades or so since September 1992.

On the ABS series annually rents continue to grow but at a more leisurely pace than was formerly the case in Sydney (+2.9 per cent), Melbourne (+2.5 per cent), Adelaide (+1.8 per cent) and Brisbane (+1.6 percent).


In the smaller capital cities, annual rental "growth" remained very muted in Hobart (+1.1 per cent) and has been negative for the past five quarters in Canberra (-2.5 per cent).

Canberra's rental index has declined from 103.9 in June 2013 to 100.5 in March 2015, a cumulative decline of 3.3 per cent, with more in the post.

Quarterly rental growth was negative for the first time in a dozen years in highly seasonal Darwin (-0.3 per cent), and it's surely only a matter of time before the annual rate of rental growth in the Top End (+1.6 per cent) follows suit.


The wrap

Rents continue to slow nationally, although some pockets of the capitals continue to show reasonably solid rental growth.

It's worth noting that while the rental index continues to scale new heights in Sydney, Melbourne and Brisbane, Perth's index moved into negative territory for the first time in aeons in the March quarter.


Perth is now moving into the downturn phase of its property cycle, with reported sales volumes and "time on market" data appearing most inspiring.

How long the downturn will last given the ongoing rate of land price inflation in Perth is unclear at this juncture.