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'.

Thursday, 7 January 2016

Building approvals to decline in 2016

Approvals decline

The November Building Approvals figures confirmed that the boom has passed with a 13 per cent seasonally adjusted decline in the month, driven by a 23 per cent drop in unit and apartment approvals. 

With investor mortgage finance in decline, this downtrend is likely to become entrenched. 

On a rolling annual basis the peak has also now passed.

City by city

House approvals are now declining in Perth, and appear to be either plateauing or declining in all capital cities.

Over much of the last decade unit and apartment prices were at or below marginal replacement cost in Sydney, and as such very little stock has been built until relatively recently.

The latest available price data to the end of 2015 suggested that annual apartment prices performed as strongly as house prices in the harbour city - and supply is now responding in kind with 35,400 units approved over the year to November. 

Brisbane has also seen some 19,800 units and apartments approved, although it remains dubious as to whether such high volumes will actually be constructed. 

High rise glut

With the gas supply gradually being cut off the rolling annual number of building approvals is being held aloft by a record volume of "high rise" approvals, the sector of the market which is clearly set to underperform from a rental return and capital growth perspective.

Expect to see building approvals continuing to trend down from record highs as 2016 progresses and investor finance fades.