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.

Sunday, 25 June 2017

Census due next Tuesday

2016 Census release

Last week, I noted here that Australia's population clock had quietly ticked past 24.5 million.

On Tuesday morning during the week ahead, we will eagerly await the official release of the 2016 Census. 

This comprehensive data series will include:

"...national, state/territory and capital city data for selected key person, family and dwelling characteristics, including age, sex, religion, language and income".

There will certainly be a trove of interesting information to be treasured and pored over. 

Curve ball

Interestingly, and as noted by the great Peter Martin, the Census will likely find that the resident population comprises more or fewer of us than estimated, in which case the population clock will need to be re-set. 

Unfortunately, this time around the collection of the Census proved to be a somewhat wobbly affair, with the website imploding due to the sheer weight of the traffic overload. 


Following the glitch, no fines were to be issued for people not completing the forms on Census night. 

Typical Aussie

Early Census information released in April by the ABS showed that the average or typical Australian is:

"...a 38 year old female who was born in Australia, and is of English ancestry. She is married and lives in a couple family with two children and has completed Year 12. She lives in a house with three bedrooms and two motor vehicles."

Given that the website was down for a long period of time, however, naturally enough the larrikin response on social media noted that the average Australian...well, couldn't log on to the Census. 

So, there is a chance that the 2016 Census could reveal some rather unexpected results, with knock-on implications for assumptions about the adequacy or otherwise of dwelling supply, labour force ratios, and so on.


We'll just have to wait and see. Stay tuned! 

Subscription reports

Subscribe

A quick plug for my advisory business, successfully serving fund managers and sophisticated investors. 

We have two popular subscriptions for institutional clients.

-Long & Short Reports: our timely market overview reports, helping you to identify key trade themes. 


-Monthly subscription reports: key macroeconomic and trade themes, leading indicators, and powerful tactical analysis. 


For more details on our reports and consultancy services, please see here.

Winter cooling

Sydney cools

The Sydney auction market is cooling as finance is harder to come by, especially for investors and those wanting to use interest-only loans. 

The preliminary clearance rate reported by Domain was a shade under 70 per cent - now tracking well below the frenzied peak - while CoreLogic put the preliminary figure a but higher at 73 per cent.

The median auction price for houses was $1,515,500, some $142,500 or 10.4 per cent higher than on the same weekend last year.

Similarly the median auction price for units was up by $76,000 or 8.6 per cent from the same weekend last year to $955,000. 

Overall the median price of $1,335,000 was the third highest on record. 


Return of the first homebuyer

A factor skewing the median price higher was that some first homebuyers are reportedly sitting on the sidelines until next weekend when the new incentives will have kicked in post-July 1.

From next week, therefore, there may be some renewed upwards pressure on entry level stock priced up to around $800,000. 

Overall, though, the credit squeeze has changed the dynamic of the market considerably, and price pressure is easing. 

In some inner suburbs such as Erskineville, Glebe, Enmore, Newtown, Haberfield, Darlinghurst, Surry Hills, Redfern, and Pyrmont I've already noted a looming shortage of rentals, with vacancy rates sinking to as close to zero as you'll ever see.

Sydney is having an absolute shocker at the moment with its traffic congestion, partly due to the disruption caused by the light rail construction.

Therefore it's no surprise that areas experiencing a rental shortage are those with great city access.

It's a different story for some of the suburbs where commuters need to drive into the city for work.

Over the next year as investors are increasingly squeezed out of the market there will likely be an increasing number of news stories reporting a Sydney rental crisis, at least for certain locations and sought-after property types. 

Contrast these tight rental markets with the overbuilding and homogeneous glut of rentals on Sydney's city fringe, 60 kilometres to the south west. 

UK house price growth since 2009

UK home prices +4.7 per cent

Hometrack reported that the annual rate of house price growth in the UK picked up the pace to +4.7 per cent in May 2017, with its 20 Cities Index rising by +5.3 per cent.

In London, annual price growth slowed to +3.3 per cent (down from as high as +13 per cent a year earlier), which is the lowest rate of price growth in the capital in five years.

Hometrack noted that there are signs of the London market bottoming out. 

The price trends within the city showed that price inflation in the lowest value areas was still tracking at +4 to +6 per cent, but offset by price falls in some of the more upmarket boroughs. 

Contrary to some media reports, since 2009 London prices have increased substantially to be up by about +85 per cent, edging out Cambridge as the strongest performing housing market.

At the other end of the spectrum are Scottish cities such as Glasgow (+12 per cent) and oil-impacted Aberdeen, as well as Newcastle in the north-east of England. 


Source: Hometrack

According to Hometrack, price growth rippled out the the large regional cities over the last quarter, including in Birmingham (+3.8 per cent), Nottingham (+3.8 per cent), Manchester (+3.3 per cent), and Newcastle (+3.5 per cent).

Saturday, 24 June 2017

Weekend reads: Must read articles of the week

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


You can subscribe for the free newsletter concerning all things Australian property here.


Friday, 23 June 2017

Lower rates reducing mortgage stress

Mortgage stress declining

Roy Morgan reported from its survey of over 50,000 households per annum that those at risk of mortgage stress fell by some 78,000 from a year ago to 16.8 per cent, to sit well below the decade average.


Source: Roy Morgan

Those 'extremely at risk' also fell to the lowest level in well over a decade, which is good to see. 

The high risk cohort overwhelmingly comprises lower income households, and is far less represented by households earning $100,000 per annum or more. 

Record LNG exports in May

LNG ramp up

It looks as though the pace of iron ore and coal exports has slowed through to June.

Gladstone was getting back up and running again in May 2017, with 1.64 million tonnes exported.


Karratha fired back up after maintenance in April, while several new trains saw another massive expansion at Gorgon.

Exports were thus at a record high of more than 5 million tonnes in May.

And there's plenty more to come too, with Wheatstone (WA) getting in on the party from August onwards.

There's been a huge rebound in gas prices from a year ago, though prices seem likely to come under downwards pressure again towards the end of June.


Treasury had forecast that LNG exports would triple between 2015 and 2021, including well over 60 million tonnes of exports in FY2018.

At the current pace, and with Wheatstone still to come, this looks set to be achieved comfortably.