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 finest 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.

Saturday, 6 December 2014

AFG writes $4.4bn of November Mortgages

AFG Releases November Index

Australia's largest mortgage aggregator Australian Finance group (AFG) released its Mortgage Index for the month of November.

The figures showed that the group wrote $4.4 billion ($4455 million) of home loan finance in November.

Historically speaking this is a huge figure, but is some way down from the record $4.7 billion ($4755 million) written in the preceding month of October.

AFG's index reflects actual values and is not seasonally adjusted. Due to the inherent volatility we smooth data on a 3 month moving average basis.

1 - Monthly Mortgages Sold Close to Record

We have charted the figures below which show that the total value of mortgages sold increased by 11.5 percent year-on-year, or 16 percent on a 3 month moving average basis.

The actual number of mortgages sold in the month follow a similar pattern with 9806 in November representing a fall from the record 10463 written in the preceding month but a 7 percent increase on the prior year figure.

2 - Huge Increase in Average NSW Mortgage Size

The average mortgage size written has increased by 13 percent on a 3 month moving average basis since April 2013, driven by a massive 19 percent increase in average NSW loan sizes.

However average loan sizes have not increased everywhere, declining by 3 percent in the Northern Territory and increasing by less than 1 percent in South Australia over the same time horizon, for example, considerably less than the rate of inflation or increases in household incomes. 

3 - Mortgages Sold by State

Also smoothed on a 3 month moving average basis, the number of mortgages written since Q3 2012 by state chart below tells its own story, with huge increases in New South Wales (+67 percent) and Victoria (+51 percent), and a less extreme increase in Queensland (+23 percent). 

Mortgages written in Western Australia experienced a tremendous surge, all but doubling, but are now easing. 

The line on the chart for South Australia has been so flat that it could have been used as the X axis, but the state data has seen a moderate recovery in the past four months.

Over the same time horizon and using the same measurement criteria the value of NSW mortgages written has increased by 104 percent, with Victoria recording a substantial 68 percent increase.

Queensland continues its studious increases in mortgages written with a 29 percent increase since Q3 2012. Brisbane increasingly looks like a market with fine prospects.

Western Australia has now flattened and it's a similar story for South Australia on AFG's home loans gauge. 

4 - NSW Investor Loan Surge

Finally, a massive 51 percent of loans in NSW were written for investors in the month, which is driving the inner Sydney market higher. 

41 percent of loans written in Victoria were also for investors.