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).

5 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 finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete 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'.

"The level of detail in Pete's work is superlative across all of Australia's housing markets" - Grant Williams, co-founder RealVision - where world class experts share their thoughts on economics & finance - & author of Things That Make You Go Hmmm...one of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, MacroBusiness.

Tuesday, 15 April 2014

Property: yield or capital gain?

Interestingly, in Britain people used to talk about investing "up north" because of the stronger yields or cash flow.

This week's headlines tell us that prices have just hit another new all-time high in Britain.

This may be true in terms of the index aggregate, but that's only half of the story.

What has really happened is that London has continued to rocket ahead as we expected, and to some extent its surrounding areas in the south-east of England via the ripple effect.

Yet prices elsewhere remain below where they were 7 years ago.

The net result is an "all-time high" for the UK, but that isn't really what has happened across the regions at all.

The United Kingdom has recently been through some high inflationary periods too (hitting 5%+), so in real terms, prices in the higher yielding areas have been absolutely clobbered in real terms.


Source: Rightmove

Rightmove's asking price index release for April continues:

"New seller asking prices hit new record high for the second consecutive month in London, up by 3.6% (+£19,818), with annual rate of 15.9% highest since November 2007.

London has hit a new record for the second consecutive month, with the price of property coming to market up by 3.6% (+£19,818) at an average of £572,348. 

The year-on-year rise of 15.9% represents a jump of £78,713, a level not seen since November 2007, before the credit crunch."

The conclusions I draw from this are that:

-quality assets win over the long term;

-international funds eventually find their way to the major financial centres and not into remote regional areas; and 

-cheap today is cheap tomorrow.