Pete Wargent blogspot

Co-founder & CEO of AllenWargent property advisory & buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place) - clients include hedge funds, resi funds, & private investors.

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.

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Friday, 24 February 2017

Perth unemployment rate above 7pc

Perth labour market deteriorates

Over December and January Greater Perth joined Greater Adelaide in the unenviable position of having  an unemployment rate which has breached 7 per cent. 

Smoothing the unemployment rate figures as an annual average shows that of the main capital cities only Perth is in an unemployment rate uptrend as the heady days of the resources boom recede.

Nationally annual employment growth has picked up a little over the past three months, albeit not by very much, with a shade over +90,000 positions added on a net basis for employment growth of +0.8 per cent. 

Having been on a storming run in 2015, annual employment growth has slowed right up in Greater Sydney to +21,000, with only Greater Melbourne adding any meaningful figure to its workforce at +85,000. 

In aggregate, in fact, the rest of Australia has added no net new employment at all over the year to January 2017, which is a rather underwhelming statistic to say the least!

Regions struggling

CoreLogic released some telling research today which showed that while capital city land values have continued to rise, regional land values in Australia are falling, down by some -8.5 per cent in 2016, noting that:

"Capital city dwelling values are rising while many regional areas are experiencing value falls."

According to CoreLogic the capital cities seeing the greatest increase in land values over the year were Sydney (+20.5 per cent), Hobart (+13.1 per cent), and Melbourne (+9.5 per cent). 

On the other hand land price falls were notched in regional New South Wales (-2.4 per cent), regional Queensland (-11.5 per cent), regional South Australia (-5 per cent), regional Western Australia (-2.3 per cent), and regional Tasmania (-3.0 per cent).

With lot sizes having decreased, on a rate per square metre basis some massive regional falls have been recorded in 2016, including -24.9 per cent in regional New South Wales, -34.8 per cent in regional Queensland, -13.2 per cent in regional South Australia, -12.5 per cent in regional Western Australia, and -17.9 per cent in regional Tasmania.

The gap between capital city and regional prices has thus continued to widen to reach its greatest ever gulf. 

You can read CoreLogic's findings in much more detail here

While it's important not to generalise too much, it is the case that many regions of Australia saw employment bolstered through the resources construction boom up until 2011-12, a trend which then retraced after the commodity price cycle peaked. 

To look at Townsville as one example of a region which saw employment trends follow this pattern, total employment picked up strongly and peaked at 125,500 in 2011, subsequently declining by more than 25 per cent before stabilising. 

While the picture seem to have improved of late, with an unemployment rate of 12 per cent across the region to date there remains too much slack in the labour market to force wage increases. 

Recent research by SQM Research showed that the rebound in commodity prices may have helped mining town property markets through their nadir after a diabolical run. 

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