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).

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 is 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 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'.

"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 of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, MacroBusiness.

Tuesday, 15 November 2016

Vacancy rates declined in October

Vacancy rates down in October

Vacancy rates declined nationally to 2.3 per cent in October according to SQM Research, led by falls in Sydney, Melbourne, Perth, Canberra, and Hobart.

Sydney (1.7 per cent) and Melbourne (1.9 per cent) have seen their rental markets tighten a little over the past year.

Nationally, rental markets have held fairly steady over the last 12 months. 

There was another uptick in Brisbane to 3 per cent, where there is also a high number of inner city apartments still under construction.

Canberra's vacancy rate declined to just 1 per cent resulting in a surge in asking rents for both houses and apartments.

However, there is a record number of units under construction in Canberra too, so this appears unlikely to last for too long.

In part thanks to ongoing population growth, SQM does not see systemic risk arising from oversupply:

"Vacancies are likely to rise in Melbourne, Brisbane and Sydney over 2017 as more new high-rise apartment developments come onto the market. 

However, we believe that oversupply will largely be limited to inner-city areas where apartment supply is rising the most, which will temper rental growth."

Chart crime!

The vacancy rates figures are not seasonally adjusted, but at the risk of indulging in some 'chart crime' I find that it sometimes helps to smooth the figures over the past four months to get a feel for the trend. 

Hobart's rental market looks to be remarkably tight which has resulted in both rents and prices popping higher. 

Adelaide looks to be the most balanced market.

Darwin's rental market looks to have stabilised somewhat, while Perth and Darwin may tentatively be converging towards a similar vacancy rate. 

Despite the construction boom, Sydney and Melbourne have not yet seen any meaningful increases on this index.

In fact, thunderous population growth in the Victorian capital has seen vacancy rates tumble from a recent seasonal peak of 3.2 per cent, although that figure was notched in the month of December 2014, traditionally a weak month for the rental market. 

Sydney remains the most expensive market by far in which to rent a house ($738/week) or an apartment ($510/week). 

In Melbourne, by comparison the median rental for a house is only $488/week. 

Median asking rents for apartments increased in both Melbourne (+4.6 per cent) and Sydney (+4.2 per cent) over the year to October.

Despite the tightening market, Hobart continues to have comfortably the lowest capital city rents in Australia at $356/week for houses and $297/week for units.