Pete Wargent blogspot

Co-founder & CEO of AllenWargent property advisory, offices in Brisbane (Riverside) & Sydney (Martin Place) - clients include hedge funds, resi funds, & private investors.

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 better 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.

Invest in Sydney/Brisbane property markets, or for media/public speaking requests, email pete@allenwargent.com

Friday, 19 February 2016

Risk environment

The evolving risk environment

Malcolm Edey, Assistant Governor at the Reserve Bank of Australia (RBA), spoke on risk and the evolving risk environment yesterday.

He lamented that market and media commentary often errs on the side of beijng unjustifiably gloomy.

Very true.

Spcifically on the residential property market, Edey noted that household debt has edged up again, to around 1.5 times household income, although as the RBA has pointed out before, after accounting for record mortgage buffers and offsets, the debt-to-income ratio has barely shifted in a decade.

As we know, lending standards have been higher since the financial crisis, and APRA has tightened criteria again within the past year, particularly with regards to judgments applied to the reliability of borrowers' incomes.

While plans are now in place to cap the growth in investor lending at 10 per cent, the rate of growth has already fallen very sharply towards 5 per cent, particularly lending with a loan-to-value ratio (LVR) of greater than 90 per cent.

From a global perspective, non-performing loans have been declining in Europe, and indeed, they have been declining as a percentage share of loans in most developed economies.

Graph 1: Large Banks' Non-performing Loans

Full transcript here