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.

"Blog is great - loads of good data and charts. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research.

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

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Wednesday, 26 October 2016


Hot auction markets with the combined capital city clearance rate spiking above 80 per cent this week on lower volumes than a year ago. 

Source: CoreLogic

Sydney's Eastern Suburbs recorded an auction clearance rate last week of 93.5 per cent, with most of the inner ring markets in the city recording elevated results. 

Tuesday, 25 October 2016

Fire it up!

Pretty good effort

Lots of talk and misinformation on my Twitter feed and elsewhere about immigration directly causing 'falling' wealth in Australia, when in fact real GDP per capita is at record highs. 

Talk about spin, S. K. Warne would be proud of that one!  

All things considered, Australia's real GDP growth performed remarkably well through the global financial crisis, so I'm not really sure why people are trying to claim otherwise (what am I saying? Of course I am). 

It's true that national income did take a bit of a hit after an extraordinarily strong 17-year run. 

Income boost

And yet, some of Australia's key commodity prices have lately been staging a monumental fightback, and real national income looks like a nailed on certainty to surge to new record highs at some point over the next few quarters.

Dalian iron futures hit "limit up" today, up +6 per cent (follow the links to Business Insider for more details). 

Fortescue Metals Group (FMG) saw its share price rocket another +6.5 per cent higher, touching a fresh 52-week high of $5.46, up by a lazy +280 per cent since its horrible January nadir. 

Not to be outdone, Dalian coking coal futures were also limit up +7 per cent. Coal prices really have exploded dramatically in recent months.

Whitehaven Coal (WHC) closed up by +5 per cent in the end at $3.14. Indeed, WHC is getting tantalisingly close to being a tenbagger from its desperate lows of just 35 cents in February!


Across the first three months of 2016-17 Australia's budget deficit was already tracking favourably versus budget forecast to the tune of $1.9 billion. 

Meanwhile, these commodity price numbers suggest a tidy windfall may be heading the way of Treasurer Morrison in due course - and potentially a huge windfall if prevailing coal prices persist for any meaningful length of time. 

Amazing news for ScoMo. Better to be lucky than smart, as they say!


Otherwise, a quiet day for news.

Stay tuned for tomorrow, though, as the all-important inflation figures are due for release!

London market steadies

Price growth slowing

House price growth across the UK 20 Cities Index was +8.5 per cent over the year to September 2016, according to HomeTrack, with growth slower than it has been, but comfortably faster than the UK national average. 

Price growth across the main cities continues to run at more than three times the rate of growth in earnings, largely thanks to low mortgage rates.  

London's quarterly house price index growth slowed to +0.9 per cent in the third quarter of the calendar year, to a current price of £480,500. 

Annual price in the capital city was down to +10 per cent, and is expected to ease to around +5 per cent by the end of the year. 

I was out and about looking at some stock around London yesterday.

Activity levels are definitely well down, but that said with the pound sterling having declined sharply since the EU referendum, enquiries from non-resident buyers have jumped, particularly in the sub-£1 million price bracket. 

The strongest quarterly price growth was seen in Cambridge (+3 per cent), with annual price growth in Cambridge now a steadier +8 per cent, following some blistering gains. 

A number of regional cities have improved markedly from a low base, after a very poor run since the financial crisis.  

The worst performing UK city market has been oil-exposed Aberdeen where prices have dropped by a punishing -9.5 per cent over the year to September, to an average of £181,300.

Monday, 24 October 2016

Why interest rates are on hold for rest of the year

I'm in London today, so no blogs for you.

On the run a bit, so I recorded a short video for you instead!

Sunday, 23 October 2016

Highest clearance rates of the entire year

Auctions ignite on lower volumes

If there had been a chance of interest rates being cut further this year, there really isn't now.

Last year, auction markets limped over the line towards the end of the year, but this year is turning out to be a different story entirely.

Capital city preliminary auction clearance rates accelerated to their highest result for the entire year at above 80 per cent nationally, according to CoreLogic. 

Sydney's blistering preliminary result of 85.6 per cent wiped the floor with the 61.3 per cent result seen this time last year when macroprudential tools were beginning to bite.

Meanwhile, Melbourne also posted an 81.8 per cent result which was much higher than the corresponding weekend from the prior year.

The other capital cities don't play host to so many auctions, and thus don't contribute so much on a weighted average basis.

Source: CoreLogic

Notably, stock levels are well down on the prior year, leaving less choice for buyers. 

Rates on hold

The Australian Bureau of Statistics will release its Consumer Price Index (CPI) or inflation figures for Q3 2016 on Wednesday this week.

While a soft annual underlying result may be expected, even a core quarterly print of ~0.4 per cent would still marginally lift the annual inflation result to 1.6 per cent from 1.5 per cent (and slightly higher still on a 6-month annualised basis). 

A speech by the new governor of the Reserve Bank of Australia Philip Lowe last week suggested that he'd be fairly comfortable running inflation below the target 2 to 3 per cent range for some time.

As such, a result like this cold fairly easily be 'marketed' as the inflationary nadir having passed. 

And for that reason I'd hazard that there's now very little chance of interest rates being cut into housing market activity as strong as this.

Barring an extraordinarily weak CPI result, then, rates are on hold until next year.