Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), & 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's 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 & charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, author of the New York Times bestsellers 'End Game' & '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'.

Friday, 19 June 2015

UK employment at record high

UK unemployment at 7 year low

A quick 45 second update on what's going down in the Old Dart.

The latest round of employment data from the UK Office for National Statistics (ONS) showed employment continuing its uptrend, at 31.1 million, a record high.

The unemployment rate is now 5.5 per cent, the lowest level seen since 2008.

And the number of unemployed person just keeps on falling, down by a further 43,000 to 1.81 million. 

A good set of numbers again.

Employment rates are pushing record highs, and actually are at record highs for women.

Wages grew by 2.7 per cent both including and excluding bonuses, which is the best result since August 2011 (inflation is running at close to zip, so in real terms these are very much decent wage price gains).

UK housing market

The UK housing market has long since rebounded from its post-financial crisis malaise in most regions, but it has been very much a two-speed recovery with London and the South East of England driving the bulk of the recovery.

The rate of gains had really begun to accelerate through to 2014, with London in particular recording some monster gains between March 2013 and August 2014.

With fears of a nascent property bubble rising, regulators effectively "gummed up" the market with the Mortgage Market Review (MMR), which entailed a series of stalling and box-ticking measures.

It certainly had the desired effect.

Prices in England are up by 4.5 per cent since a year ago on the ONS index, which represents a material slowdown in price gains.

London prices have seen a slowdown on this index too, slowing from an annual growth rate of 11.2 per cent in March to just 4.3 per cent in the year to May 2015.

Mortgage approvals rebound post MMR

Ostensibly the housing market appears to have slowed quite sharply.

However, it is worth remembering that there are still loan products out there which allow some borrowers to grab money at a rate of under 2 per cent - there is even a two year fixed rate product on the market at a ridiculously cheap 1.07 per cent since the end of May!

Meanwhile, unemployment is at a seven year low, employment is surging to record highs, and there is a looming chronic housing shortage in the South East of England, where prices are up 7.2 per cent year-on-year.

More significantly, the latest round of mortgage data from the Bank of England revealed £11.1 billion of mortgage finance written in April 2015, with some 68,087 loans approved. 

This is the strongest monthly jump we have seen in more than six years and the greatest number of loan approvals since February 2014, so calls of a housing market correction seem likely to be premature.

In short, the impact of the MMR is now receding into the rear view mirror, and with the election uncertainty now also out of the way borrowers are likely to take advantage of some of the cheapest loan rates in UK history.