Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

'Huge fan of your work. Very impressive!' - Scott Pape, The Barefoot Investor, Australia's #1 bestseller.

'Must-read, must-follow, one of the finest analysts in Australia' - Stephen Koukoulas, ex-Senior Economics Adviser to Prime Minister Gillard.

'One of Australia's brightest financial minds, must-follow for accurate & in-depth analysis' - David Scutt, Business Insider.

'I've been investing 40 years yet still learn new concepts from Pete; one of the finest young commentators' - Michael Yardney, Amazon #1 bestseller.

'The most knowledgeable person on Aussie real estate - loads of good data & charts...most comprehensive analyst I follow in Oz' - Jonathan Tepper, Variant Perception, 2 x NYT bestseller.

Wednesday, 6 April 2016

Listings fall

SQM listings update

SQM Research's latest listings data for March showed a bit of a fall of 0.8 per cent nationally.

The two markets which have noticeably recorded falls over the past year are Melbourne and Hobart, suggesting improving sentiment.

Thankfully the Sydney market has been becalmed since around this time last year, which is about the time when the market was become excessively tight and increasingly frenzied. 

The other interesting trend highlighted by SQM was that Canberra recorded a 6.1 per drop in listings in March, adding further weight to evidence that the capital's market is now a rising one. 

I looked in a bit more detail at the ABS Residential Property Price Indexes here, which showed Canberra dwelling prices leaping by +2.8 per cent in the December quarter. 

Canberra is an unusual property market, with the city have high disposable household incomes and artificially high lot prices as a result of restrictive land release policies. 

There's no real reason that land prices should be as high as they are, other than dysfunctional policy.

Charted below are SQM's listings figures, which show that despite a year-on-year increase, Sydney still has fewer listings than Brisbane, and many fewer listings than Melbourne.

Some potentially good news for Perth here may be that the number of listings appears to have stabilized a little.

The year-on-year percentage change in listings figures charted below confirm the tightening in Hobart (-8.7 per cent) and Melbourne (-4.6 per cent), but increases in Sydney (+14.7 per cent) and Darwin (+5.9 per cent). 

On this measure at least, Perth seems to have become a little more of a balanced market.

SQM's Asking Price Index figures now show asking prices for Sydney units (+9.4 per cent) moving some way ahead of asking prices for houses (+8 per cent), perhaps in part reflective of a shift in composition to newer stock as well as affordability constraints related to houses.

It's still relatively early days following the implementation of macro-prudential measures or credit rationing - effectively the hosing down of investor credit - but another indicator worth watching is SQM's Asking Rents Index, which now has Sydney unit rents up +5.7 per cent over the past year and Melbourne units up by +3.9 per cent.

Asking rents for houses are also up strongly in the tightening Canberra and Hobart markets, but significant declines have been recorded in Perth and Darwin. 

More from SQM here - sign up for their excellent free newsletter while you're there as well.