Pete Wargent blogspot

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

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Wednesday, 18 May 2016

Sydneysiders push new motor sales to record

Car sales at record

New motor vehicle sales declined a bit in seasonally adjusted terms in April to 97,604, although the trend result is at a record high. 

Over the year to April more than 1.16 million new motor vehicles were sold, the highest annual result on record. 

Supersized Sydney

Sports Utilities (SUVs) have accounted for a record 36.3 per cent of sales over the past year.

The main driver of record sales has been New South Wales, where volumes have stormed ahead.

Over the year to April a record 391,760 new vehicles were sold in New South Wales, up by a huge 8.3 per cent year-on-year. 

Sydney's economy is benefiting handsomely from its dwelling and infrastructure construction boom. 

Elsewhere the picture is more mixed, with declines experienced in the resources states. 

Finally, according to Federal Chamber of Automotive Industries (FCAI) data, auto production volumes have just about been clinging on over the past twelve months, following a very sharp decline in recent years.

169,943 vehicles were produced over the year to April, for a fairly stable result.

Sadly, manufacture will cease in Australia over the coming couple of years, which will have a negative impact on the respective economies and labour markets of parts of Melbourne and Adelaide. 

Economy ticking along

New motor sales at record highs represent further evidence that the economy is doing reasonably well. 

However, with inflation at such low levels the Reserve Bank may take the opportunity to cut interest rates even further later in the year, at least according to the RBA's Board Member John Edwards. 

Edwards noted yesterday that low inflation potentially presents "an opportunity" to cut interest rates further.


Global experience has shown that when the population of a city approaches 5 million, congestion begins to become a genuine challenge.

While demographic statistics cannot be so accurate, it seems likely that the population of Greater Sydney will pass 5 million before the end of the this tax year (i.e. imminently).

Partly for this reason, I've long believed that over time property buyers will "trade space for place" in targeting the limited number of suburbs which are within a short commuting distance of the city.

The preliminary auction clearance rates last week, I believe, are not coincidental:

-Lower North Shore 93.1 per cent

-Outer South West 26.3 per cent