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 of the world's most popular & widely-read financial publications.

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

Thursday, 20 November 2014

London Prices Surge Past £600,000

London Prices New Record High

Around three months ago now we got the first sense on the ground that a sense of relative calm was returning to the London property market, following months of gazumping and prices going way over fair market value.

Not to be deterred, Rightmove's November asking price index showed the average price of newly marketed property in London surpassing £600,000 for the first time at £601,180.

This is rather awkward for the 'global expert' types who reported that the market had London had crashed after the August release, their hopeless 'analysis' neglecting to account for the obvious seasonality of the index.

Nevertheless, as noted previously, we definitely have seen sentiment in the London market returning towards some kind of relative sanity. 

Although Rightmove does not seasonally adjust its index, if we run the same figures on a 6mMA basis the chart presents a far better sense of what is really happening, which is slower growth in London, and UK property markets threatening to roll over in the regions.

Regions Slow

In fact, if you drill into the figures you will find that prices are moving up in London, though more slowly, and also apreciating in the South-East and East Anglia (i.e. the areas immediately around London and commutable to the capital), but have eased back a little elsewhere.

The Mortgage Market Review (MMR) has perhaps played its part in slowing the market, although in my personal experience this has been as much caused by tedious and administrative box-ticking exercises in the manner of a Sarbanes-Oxley review as much as it has genuinely tough lending measures. 

That said, we don't see an impending crash in regional Britain or anything of that ilk, despite the apparent weakness.

With stock on market per agency at the lowest level ever recorded by Rightmove, many markets are simply stagnant rather than declining, although anecdotally I have seen a few more "SOLD" signs around here of late, so perhaps sentiment is just shifting a little for the better.

Ex-London Prices Corrected Sharply

Generally speaking, if you strip out London, UK regional prices have not really picked up in aggregate in this cycle at all, and are down by approximately 35 percent since 2007 in real terms based on Land Registry data, after accounting for some punchy post-financial crisis inflation prints (which, incidentally, have now slowed). 

These figures figures make a mockery of the notion of a "UK property bubble" with ex-London prices off by a thumping 35 percent in real terms and mortgages available from preposterously cheap rates. 

London Boroughs

After a 20 year run which has defied belief, the London Borough of Kensington & Chelsea - the best performing market in Britain by a huge margin, as we charted from Land Registry data here - has finally slowed, being the only London Borough to record an annualised fall in prices.

Certainly AllenWargent property buyers will certainly some satisfied clients looking at these annual price movements, including:

-Islington +20 percent 
-Greenwich +19 percent
-Ealing +23 percent 
-Croydon +19 percent 

We have in the past year focussed on areas set to benefit from the new Crossrail project, and a major new shopping complex and re-development in the case of Croydon.

In fact, we mentioned Croydon as a hotspot way back in January on this blog, so 18.7 percent capital growth year-on-year is a tidy enough result, with plenty more to come in the post.