Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), & 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's 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 & charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, author of the New York Times bestsellers 'End Game' & '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 Hmmm, one of the world's most popular & widely-read financial publications.

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

Friday, 10 February 2017

Housing finance accelerates through 2016 to record high


Total housing finance accelerated to $33.4 billion in seasonally adjusted terms in December 2016, according to the ABS. 

The original data showed that the preceding month of November saw an unprecedented $36.8 billion of housing finance commitments. 

The smoothed trend figures suggest a strong re-acceleration in total housing finance since February 2016.

For once the December increase was driven by homebuyers rather than investors, although year-on-year investor finance has moved significantly higher (by 21 per cent in trend terms).

There was a fair increase in the number of owner-occupier loan commitments in December.

Looking at the average loan size figures suggests that first homebuyers may well be tapped out, while those already in the market are able to use existing equity to use more leverage (in fact, we actually know that this is happening).

Queensland has the most consistently improving homebuyer sector, although Sydney and Melbourne do look to be shaping upwards again. I'll look at the investor finance figures in more detail next week.

As a point of interest, here is where the first homebuyers are taking on the biggest and smallest loans on average. 

I believe that first homebuyers may be offered something along the lines if stamp duty relief in the May Budget (or perhaps simply the old-fashioned grants will return). 

I'm not quite sure how this all might work, but one senses that something is coming. Watch this space.

Finally the value of loans for for owner-occupied new dwellings appears to have begun to rise again, perhaps as the surge of off-the-plan purchases begin to settle. 

The wrap

As usual the devil is in the detail, but the big picture is that housing finance - having slowed into the end of 2015 in the face of macroprudential measures - accelerated its way through 2017. 

The actual split between owner-occupiers and investors remains somewhat questionable given revisions reported by some lenders.