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.

Wednesday, 17 July 2013

Building activity - nothing too exciting

Value of building work done: up +6% y/y for new residential building.

Up a bit, but still not enough.

Graph: Value of work done, Chain volume measures—Trend estimates

Source: ABS

Dwelling units commenced: up a promising 13% on a year ago, but scored a miss this quarter.

Possibly a volatile data set, but not a great result this time around.

Graph: Dwelling units commenced

Source: ABS

Private dwellings commenced: units and apartments +21% year-on-year, but the quarterly figures are all over the place and down sharply this quarter. 

Far less of an increase for houses, only being +5% y/y.

Graph: Private dwellings commenced, Trend estimates

Source: ABS

Overall, you could make a case for there being an uptrend in activity over the past year, but it wouldn't be a particularly convincing one.

Residential building activity is especially vital for Australia for two reasons.

Firstly, because the Reserve Bank is relying upon an increase in activity to rebalance the economy away from mining construction.

And secondly, because Australian city population growth is so high, as detailed here by Michael Matusik:

"Those urban places that saw over 4,000 new heads (above ground) during 2012 include:

Melbourne (77,000 increase); Perth (65,000); Sydney (62,000); Brisbane (43,000); Adelaide (14,000); Gold Coast (11,000); Canberra (7,000); Sunshine Coast (5,000); Newcastle (5,000) & Townsville (4,000).

These top ten growth cities hold four-fifths of Australia’s population growth.  Our eight capital cities combined make up 70 per cent of the country’s population growth."