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).

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.

Thursday, 21 July 2016

Mind the gap!

Dwelling prices up in Q2

House prices rose +1.5 per cent nationally in the June quarter, and unit prices by +0.7 per cent. 

Median Sydney house prices rose by +2.4 per cent in the second quarter to $1,021,968, with apartment prices also up by +0.6 per cent to a record $669,030. 

Meanwhile, Brisbane house prices and unit prices have diverged to record the widest gap in twelve years, according to Domain Group

In fact, at $370,251 the median unit price is Brisbane is still more than $10,000 below where it was in June 2010. 

The typical home loan rate five years ago was also around 2.5 per cent higher than it is today.

Thus apartments in Brisbane have become considerably more affordable over the past half a dozen years as household incomes have steadily increased. 

There is plenty of high-rise apartment stock still under construction in each of the largest capital cities, so the gap between median house and unit prices in Brisbane is likely to widen further still over the next year. 

Of course, the situation is rarely quite as clear cut as implied by median prices.

Quality units and townhouses with a high land value content (generally, smaller developments) in some of the more popular and supply-constrained suburbs such as Newmarket, New Farm, and Teneriffe have generally performed well, but units and apartments in some other areas have performed poorly. 

In the end it comes down to the areas and property types that people really want to leave in, and finding properties with genuine scarcity value. 

I had a yarn with Domain about it - see here (or click the image below): 


The immediate outlook for property markets will to some extent be determined by next week's inflation result.

A softer than expected result could see interest rates cut to a record low level.

However, there is a fair chance that the rebound in fuel prices could keep rates on hold.