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.

Sunday, 13 July 2014

Supply

New supply...

The next phase of the Central Park, Broadway development in Sydney getting close to roll-out, the brewery conversion sitting in the shadow of the award-winning Living Mall development in Ultimo/Central. New apartment supply is slowly but surely coming onto the market now...


The new supply is certainly needed, with Greater Sydney's population growing at a rate of around 80,000 persons per annum.

Existing demand...

Tomorrow, the ABS will release its Lending Finance data for May, which will shed more light on where investor loans are being deployed.

The April data revealed continued soaring demand for investment property in New South Wales (overwhelmingly, Sydney) reaching unprecedented heights, with the rolling annual value of investor loans rising in a near parabolic fashion (click chart):


The above chart is instructive in that it shows how, ultimately, housing finance always must come back to economics and labour markets.

It is interesting to consider that when in 1996 an "Australia edition" of the board game of Monopoly was released, the titles were ordered by capital city thus:


That is: Darwin, Hobart, Perth, Adelaide, Brisbane, Melbourne, Sydney and Canberra, with Canberra taking top spot due its capital city status.

But note how the capital cities and states with surging mining and resources economies (Darwin and the Northern Territory, Perth and Western Australia) have powered ahead today.

However, the southern states and capital cities with weaker economies (Hobart and Tasmania, Adelaide and South Australia) have been left floundering.

The median dwelling price in Perth is more than 40% higher than that of Adelaide today.

Meanwhile, Darwin's median house price is higher than that of Perth, Brisbane and Adelaide, in equal parts due to a tremendous resources boom and Darwin's woeful restrictions on dwelling supply (and yet people write books claiming that supply is essentially irrelevant? Very odd).

Anyway, we'll see what tomorrow's Lending Finance data brings. 

In particular, it will be interesting to see whether Sydney continues to boom in terms of investor activity, spurred on by low borrowing rates (click chart):