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.

"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.

Invest in Sydney/Brisbane property markets, or for media/public speaking requests, email pete@allenwargent.com

Thursday, 26 September 2013

Australian population growth is flying

OK, let's ignore the smoke and mirrors for a moment and take a considered look at the numbers.

ABS numbers tend to fluctuate quite a bit m/m and q/q...but over a year you tend to get a reasonable picture of what is going on.

And look at the population growth across Australia over the past 12 months - a staggering 397,400 extra heads.

So, where are they all heading?


Source: ABS

The quick and dirty answer is: not to Tasmania (600 more people), NT (+4,100), Canberra and the ACT (+8,100) or South Australia (+15,600).

The booming states in absolute terms are Victoria (+101,900), Queensland (+92,300), New South Wales (+92,300) and Western Australia (+82,600).

When viewed on a percentage basis, WA is the clear standout, thanks to its mining construction boom:

Graph: Population Growth Rate, Year ended March 2013
Source: ABS

And, the trend nationally? It remains very, very strong.

Graph: Population growth, Quarterly

Source: ABS

397,400 extra persons per annum, is it any wonder Australian property prices didn't fall dramatically during and after the global financial crisis as so many confidently but falsely predicted?

For a decade now we have been swamped with 'Australian property bubble' articles, which must be a little bemusing for inhabitants of Hobart, Adelaide and Brisbane, where prices have not gone anywhere for years. 

Meanwhile wages have increased (thus decreasing prices in real terms) and interest rates have dropped to generational lows, improving the affordability of repayments.

Even in Sydney property prices have comfortably underperformed household incomes since the last 'irrational peak' in Q1,2004. 

That will no doubt change through 2014 when prices boom in response to low interest rates, massive demand from Asian and domestic buyers and investors, and an undersupply of appropriate dwellings.

Melbourne dwelling prices are a somewhat different story and have absolutely boomed by well over 50% since 2006.

Dwelling Prices graph

But the authors of these neverending property bubble articles should maybe stop to consider: are we talking about a purely speculative property bubble as is forever the implication? 

Or a we to some extent talking about a country where every year we are pouring 400,000 more people into a handful of popular locations, which has prevented land prices in those locations falling to the level that people who rent where they live desire?

Taking a longer-term perspective, if we continue down the route we are presently taking, we'll no doubt get a correction at some point, but a decade on we'll still be having the same old discussions.

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Flying in from Kuala Lumpur, back on deck as a Sydneysider tomorrow.