Pete Wargent blogspot

Co-founder & CEO of AllenWargent property advisory & buyer's 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.

"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.

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Friday, 25 January 2013

Forget February rate cut due to dwelling price rises

Now don't get me wrong, I'm something of a sceptic when it comes to monthly home value movements.

They have a habit of being up one month and down the next, and on a quarter to quarter basis showing significant variances between providers.

Still, the monthly figures do make for some excellent lazy journalism and headlines.

But increasingly the monthly figures are becoming noteworthy for the simple reason that the Reserve Bank Board Minutes are unfailingly referring to housing markets "weakening" or "increasing in confidence" on a month to month basis.

By definition they must surely be relying to some extent - one would assume - on monthly numbers to do so.

Given that RP Data has Sydney home values up by more than 2% already this year, I think we can safely say  no to a February interest rate cut.

The 5 capital city aggregate also shows a gain, albeit a somewhat more moderate one.

Of course, dwelling prices are only one small piece of the interest rate puzzle, but iron ore is resilient, the dollar has weakened and unemployment has not surprised on the upside.

Our stock market has been fairly bounding along for months now.

Overseas China's manufacturing data was solid, and in the US there are reports of rising house prices and consumer confidence.

Therefore, there seems no reason to risk igniting domestic housing any further by cutting again to just 2.75%.

It's on hold for me.

Source: RP Data