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 finest 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.

Sunday, 12 February 2017

Rent-vesting?

The rise of the rent-vestor

I was quoted in this Domain piece yesterday which discusses "rent-vesting".

That is, renting where you live but also owning an investment property as a foothold on the property ladder. 

Historically it hasn't been all that common, but it's becoming less unusual in the capital cities, not least because of the generous tax benefits in Australia. 

In rising markets it's fairly typical these days to see young couples moving home and opting to retain a capital city apartment as an investment property. 


In an era where there is more casualisation in the workforce, and when people are changing jobs, careers and locations more rapidly than ever before, rent-vesting can make sense for some people (provided that they can comfortably service a mortgage debt, of course). 

The strategy allows people more flexibility in where they live and rent, potentially being able to afford to live in a superior or more convenient area (given that rental yields are typically lower than average in prime capital city locations) but adjusting to a cheaper location at relatively short notice if the household budget so requires. 

For people who move location or place of employment often, it is simply impractical to continue paying punitive stamp duties and other transaction costs each and every time they move. 

Every strategy has a downside, of course, and rent-vesting tenants can feel as though they have less security of tenure while being unable to make a place 'their own'.

Packing and unpacking can also be a crushingly dull task at the best of times.

I think we'll see more rent-vestors in the future than there are today, but it's more popular in rising markets than deteriorating markets.

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Auctions get up and running

Never mind the record high temperatures in Sydney at the weekend, the preliminary auction clearance rate rose as high as an exceptionally strong 84.8 per cent (CoreLogic), while Domain had the figure at 84.2 per cent.

A blazing start to the auction year, then.

This was the first weekend from which there was a reasonable sample of auctions to draw data. The median auction price in Sydney was $1,200,000, which was 15 per cent higher than on the corresponding weekend of last year when the median price under the hammer was $1,041,500.

There will, however, be far bigger tests ahead as auction listings ramp up from here.


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