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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Tuesday, 1 October 2013

House prices hit new record highs - Sydney housing market to blow off?

Just watching Sky News Business this morning - RP Data are set to report their house price indices for September and will show a rise of 1.6% across Australian capital cities for the month.

This will take Australian prices nationally to all-time record highs as some of us anticipated - to widespread derision, I might add - largely due to the ultra-low interest rate environment and a great swathe of investors hitting the major city markets.

Some of Australia's property markets remain soft, however.

Hobart is having a poor run with prices falling by 3% over the last quarter, while Adelaide's market has failed to record any gains over the past year, which is a poor show given an official cash rate of 2.50%. In Darwin's seasonal market, year-on-year price growth seems finally to have calmed a little (+2.2% y/y).

Melbourne's market appears to remain very strong with prices zipping up again by a very significant 5% q/q including 2.4% in September alone; perhaps an even stronger showing over the past year than anyone could reasonably have guessed, in my view. 

But it's the Sydney market that is really looking set to blow off thanks to its booming population growth and very tight supply of appropriate and desirable housing stock, as I've basically been carping on about for the last five years.

RP Data reported that Sydney prices increased by 2.5% in the month of September.

Source: RP Data

In truth, I don't know enough about 'what the wires do' with regards to RP Data's daily index, but although the stats imply that dwelling prices are continuing to move smoothly upwards from day to day, I wouldn't mind a bet that they can already anticipate Sydney prices moving materially higher over the coming months.

RP Data has Sydney dwelling prices up by more than 9.5% in 2013 and easily breaking record highs being up by close to 13% from their trough. 

Certainly no interest cuts on that kind of data.

Source: RP Data