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.

Wednesday, 15 July 2015

Perth, Darwin see vacancy rates climb (rents decline)

Vacancy rates at 2.4 per cent

SQM Research released its vacancy rates data for the month of June 2015 yesterday.

At this stage in the construction cycle we might expect to see vacancy rates rising, and on a national basis this did indeed prove to be the case with capital city vacancy rates of 2.4 per cent in June slightly higher than the 2.3 per cent recorded one year ago.

The most interesting points of note related to the variances by city.

Over the past year vacancies were a little lower in Sydney, ticking down from 1.9 per cent to 1.8 per cent. Meanwhile Melbourne has seen its previously elevated vacancy rates decline from 2.7 per cent to 2.3 per cent.

The Hobart market has also tightened to become a landlords' market with vacancies declining from 1.8 per cent to 1.5 per cent.

However, it is now a markedly different story in the resources cities where vacancy rates have gambolled to 3.5 per cent in Darwin and 3.6 per cent in Perth.

This is a weak result for the resources capitals which mirrors what we have seen from an array of other data releases

Darwin rents crunced

Over the past 12 months the SQM figures showed that although asking rents have increased across most capital cities, asking rents in Darwin have been crunched, declining by 16.4 per cent for houses and 9.8 per cent for units.

At long last it looks as though the Top End's incredible property market run - which has defied belief at times - is finally set to end in a sharp correction. 

This serves as a timely reminder of just how wide of the mark many of the property bubble theories have been - Darwin apparently had the "smallest property bubble" according to the academics.

This was despite the full ABS Residential Property Price Indexes series for the Top End capital exploding from just 40.5 in Q3 2003 to 113.7 by Q4 2014! 

Of course this was absolute hooey as the scale of the Darwin price correction will now doubtless prove.

In the real world a wide range of other market fundamentals are far more important than rental yields, which are themselves driven by the underlying market dynamics - indeed, just as is the case in other assets classes, elevated yields are often reflective of real or perceived higher risk. 

Perth rents are also down over the past year, although somewhat less dramatically, with house and unit asking rents down by 6.2 per cent and 4.9 per cent respectively.