Pete Wargent blogspot

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

5 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's one of the finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete 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 & charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, author of the New York Times bestsellers 'End Game' & 'Code Red'.

"The level of detail in Pete's work is superlative across all of Australia's housing markets" - Grant Williams, co-founder RealVision - where world class experts share their thoughts on economics & finance - author of Things That Make You Go Hmmm, one of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, 'MacroBusiness'.

Friday, 28 July 2017

Sydney & its super-frothy house prices

Frothy Sydney prices

Sydney’s crazily high house prices seem to have become a staple topic at barbecues and sausage sizzles across the harbour city these days.

With prices seemingly at or close the peak of the market cycle, should you even try to buy today, assuming you can afford the high entry prices?

There’s no 'one size fits all' answer to that question, but here are a few important considerations...

Time horizon

With the jobs market more fluid than ever before, we are changing jobs, locations, and even careers far more frequently today than was the case for generations past.

With stamp duty levies on Sydney purchases now so high, it may only make sense to buy a home if you are reasonably confident that you will be in Sydney for at least a few years, and ideally longer.

The transaction costs of buying a property can sometimes be up to 5 to 6 per cent of the purchase price, and there are further costs to account for when you come to sell.

First homebuyer incentives

The New South Wales State Government has recognised this hurdle facing first homebuyers and from 1 July 2017 has abolished stamp duty on all homes bought by first homebuyers up to $650,000, while offering stamp duty relief for homes priced up to $800,000.

The NSW Government’s comprehensive package included other measures to promote affordability too (albeit they aren't really designed to lower prices).

Given the above, it may not be a bad time to purchase for first homebuyers, provided you have a reasonable time horizon.

At least historically, waiting for prices to crash in the most populous cities has not been a fruitful strategy for those aiming to get onto the housing ladder.

Record building boom

The above having been said, there are presently more than 82,000 new dwellings under construction across the state, the highest figure on record, so some areas are at a greater risk of falling prices than others.

These areas typically include the suburbs where most new dwellings are built, such as blocks of land on the city fringe, and high-rise apartments in some of the suburban construction hotspots.

‘Rentvesting’

With the uncertainty surrounding Sydney’s expensive housing market, more young aspiring homeowners are choosing to rent where they want to live, while buying an investment property elsewhere to get a toehold on the housing ladder.

If well planned and executed this can be an effective strategy. There’s even a new name for it: ‘rentvesting’.

What do you think? Keen to hear your thoughts!


Come to our Money for Life workshop on Saturday 7 October 2017, for straight-talking, no nonsense financial education (click image for details).