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'.

Tuesday, 11 July 2017

Tough times for first homebuyers

Rebalancing

A pretty solid result for housing finance in May with seasonally adjusted total finance rising by 1.3 per cent to just over $33 billion. 

Looking at the smoother trend figures, total housing finance has been fairly flat now for about two years, since macroprudential measures first kicked into gear. 

The value of investors loans continues to moderate - with home loans by and large picking up the slack - and this rebalancing has manifested itself recently in rising rents in Sydney and Melbourne. 


First homebuyers accounted for 14 per cent of commitments in May, a slight rise. 

But the difference between the average loan size for first homebuyers at $318,000 and non first-homebuyers, which has surged again to $390,100, has blown out to its widest ever margin.

Even smoothing the figures for the last year shows the dichotomy, and it's making life challenging for first homebuyers. 


Homebuyer commitments are trending higher in the two most populous states, largely offsetting corresponding declines in investor loans.


New dwelling sales surge

The number of new dwellings purchase by owner-occupiers has risen strongly to sit at close to the highest ever monthly level, matched only on one occasion during the days of financial crisis stimulus. 


It seems that developers in Queensland have successfully convinced more homebuyers to buy new.


Lending for the construction of new dwellings was also strong, at its best level since early 2015.

The wrap

Overall, a solid if unspectacular result, with the average loan size for non-first homebuyers blazing higher again to sit just a fraction below the 2015 record level of $390,700.

Investor loans continued to moderate as expected, and there will be a further slowing to come in the following months. 

I'll look at the investor loans by state on Thursday.