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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Thursday, 19 September 2013

What's happening to Melbourne dwelling prices?

Sceptical though I am about reading too much into short-term data, RP Data's Daily Home Value Index is always entertaining and is showing some strong indications of property price rises.

It's also worth noting that all property types within a city do not move in a harmonious manner as statistics at the macro level might seem to imply.

And in fact, Melbourne is perhaps a prime example of a city with property markets with deviating prospects (high rise inner-city stock and remote fringe suburbs may fare less well than quality dwellings in landlocked middle suburbs, for example).

Source: RP Data

Dwelling prices in Melbourne are reported as being up by 6.87% q/q, with I find remarkable, although the gains y/y are notably less dramatic at 5.70%.

As for Sydney, it's equally remarkable to think that as recently as the first week of June commentators were talking about prices possibly being in a downtrend (they quite obviously weren't) due to an instantaneous negative consumer response to the budget (?). 

Since June 9, Sydney's dwelling prices are also reported as being up by more than 7%, disproving the theory.

The numbers for the last quarter aren't really backing me up here, but my gut feeling is that Sydney has stronger fundamentals than Melbourne at this point in time. 

What about elsewhere? There is talk of slowing jobs growth in Perth as the mining boom shifts away from construction and towards production. Prices remain up very strongly y/y, but gains seem to have slowed up.

There appear to be tentative signs of life in Brisbane and perhaps better days ahead for the sunshine state it would seem.

The only city where prices remain below where they were a year ago is Adelaide, although with interest rates looking to be locked at bargain basement levels for some time to come, moderate rises would surely be on the cards.

Whether or not the city can recapture its previous peaks of 2010 only time will tell.

Dwelling Prices graph