Pete Wargent blogspot
Co-founder & CEO of AllenWargent property advisory, 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.
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"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'.
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Friday, 24 August 2012
Reserve Bank Guv tells us to cheer up: again (& notes that the "gentle decline" in dwelling prices may be over)
You have to laugh. With some of the press you read today, you would think that we were living through some kind of Armageddon.
Yet, as has been the pattern over recent months, when Reserve Bank Governor Glenn Stevens addressed the House of Representatives he once again took on a positive outlook.
In particular I noted this comment, which implies that the peak of the mining investment boom might be a couple of years away yet:
"Looking ahead, the peak of the resource investment boom as share of GDP – the highest such peak in at least a century – will occur within the next year or two. After that the rate of resource investment is likely to decline, while the export shipments of the resources themselves will pick up. By then we might expect that some other sectors that have been weak of late, like residential and non-residential construction, might be starting to pick up."
Also, I picked out this comment:
"...the Chinese economy looks like it has slowed to a pace of growth that is likely to be more sustainable. This is, though, clearly below the pace seen for much of the recent past and the implications of this new pace of growth for the trajectory of demand for various commodities are still being worked through in the relevant markets. Commodity prices have declined. Australia's terms of trade peaked about a year ago. However, they remain high in comparison with most of the past century."
And for those interested in the property markets, Stevens had this to say:
"It is too early to tell how much difference the sequence of decisions to lower interest rates late last year and in the middle of this year has made to the economy, though we can observe that dwelling prices may have stopped their earlier gentle decline, and business credit has been growing at its fastest pace for three years."
Read that again. "Dwelling prices may have stopped their gentle decline". Now doesn't that wording sound a million miles away from the scaremongering we read in various forums?! (or 'fora' depending on your Latin preferences with regards to plurals).
Overall, while there were naturally some cautionary notes, Stevens tends to highlight the positives such as increased consumer spending, expansion of GDP, moderate inflation and benign unemployment.
It feels as though he is encouraging us not to 'talk ourselves into' a recession. If interested, you can read his full speech here.
The stock market looks set for a weak close to the week's trading, but even so the market is approaching the peak that it reached back at the start of May, it having experienced quite a wobble (of ≈10%) in the intervening period reflecting a "bout of anxiety" over the Euro.
Rosier climes ahead? We certainly hope so!