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.

Friday, 14 March 2014

Oversight

I recently wrote a blog about the RBA's charts on property construction costs.

The Reserve Bank's arguments were largely concentrated on construction costs being a major driver of property price growth.

While there is some merit to their arguments, RP Data's Cameron Kusher produced this chart below today which shows that although the median lot price in cities like Sydney has gone nowhere for a decade, the lot price per square metre has increased sharply in every capital city.


Fair enough, and he's right of course.

A variety of factors have conspired to put pressure on Australia's capital city land prices, as covered many times - including population growth, inadequate supply, record low interest rates and a number of other factors.

The RBA's arguments remain valid insofar as it remains very expensive per dwelling to construct multistorey blocks of apartments in capital city infill sites, but clearly there has been a considerable land price appreciation too.

Recent approvals data has shown a material uplift in the number of apartments to be constructed as opposed to detached dwellings.

Graph 8: Construction Costs