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.

Monday, 20 October 2014

South-East England property prices "to rise 37pc in 5 years"

Rightmove released its October UK asking price index data today which recorded the usual October rise of 2.6 percent. 

Readers may recall that I couldn't resist biting at some of the absurd reporting of the August data where pundits who clearly misunderstand London market data called excitedly a market crash based on one month of figures. 

I suggested waiting for the October data, given the significant seasonality of the index. Sure enough, asking prices 'rose' by 7 percent in London in the month. 


Of course it is plainly ridiculous to look at volatile monthly data in this manner - instead you need to observe the trends, and an easy way to do this is to chart the data, which I have done below. 

London prices have risen by more than 130 percent  since May 2003. No matter which way you try to torture the data, there is no crash, but through our on-the-ground experience what we do see is a moderation ahead (click chart to expand).


If you have been following our London commentary for a while, you will know that we believe that the London property market has now moderated. Prices have not fallen, but the market mania has certainly subsided, and competition for properties has eased from the frantic panic buying seen across the past year.

Rightmove's index is very noisy, so I have charted the data on a 6 month moving average basis below, which we believe is beginning to reflect the moderation in London market growth that we have seen on the ground.


It is not surprising to see one of the locations where we have bought property for our clients in the best performing list - Ealing - where investor interest in the market is now rising as we expected thanks to the impact of the "game-changing" Crossrail project


Perhaps the biggest story from this month's Rightmove release is that the south-east of England with a +10 percent growth asking prices over the past year is now taking over from London as the leader of UK property price growth. 

A mass migration to the south-east of the country combined with an acute dwelling shortage is expected to see prices boom over the years ahead. Rightmove and Oxford Economics forecast an extraordinary 37 percent capital growth for the south east over the next five years and 33 percent capital growth for London:

"The ripple effect of buyers priced out of London combined with those cashing in and moving out of the capital means that the South East has taken London’s boom-town crown. Upwards price pressure is being further fuelled by a reluctance of home owners in the hotspots of the South East to come to market. 
Analysis by Rightmove and Oxford Economics forecasts that the South East will be the region with the highest increase in property values in the next five years, driven by a continuation of this supply/demand imbalance in the medium term. While the national average is a 30% uplift, the South East is forecast to be up by 37%, ahead of London at 33%."