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'.

Tuesday, 14 March 2017

Queensland recovery: the good & the ugly

Queensland recovery

Each fortnight I update my chart of the titles registry figures for Queensland, although I don't post the results here all that often. 

When figures aren't seasonally adjusted, it pays to be wary of drawing conclusions from individual weeks or months of data. 

After all how many times have new home sales figures "peaked" in this cycle, or how may times has housing finance "tanked", or buying intentions "cratered", or consumer confidence been "smashed", and so on?

Every other month in each case, pretty much. 

By drilling trendlines through the titles registry figures you can see that Queensland's mortgage and transfers market has ground its way through a long, slow recovery since bottoming around late 2011. 

There was a blip in activity following APRA's initial salvo of macroprudential measures - and part of the increase in activity relates to a surge in multi-unit construction - but for now the uptrend in activity remains in place. 

Brisbane land values rise

The Queensland Government updated its annual land valuations for 2017 last week, which showed a very wide range of outcomes across the state.

The post-2012 malaise continues apace across many of the resources regions.

There was more excruciating news for Gladstone which recorded another massive 20.6 per cent drop in median land values (although the Mayor kindly noted that residents shouldn't expect a reduction in their rates bill).

Over the past four years Gladstone land values have recorded losses of -5.4 per cent, -14.6 per cent, -4.8 per cent, and -20.6 per cent respectively.

Brutal, with land prices declining to just $113,000,

Dwelling prices have often seen drops of well over 50 per cent since 2012, and in many case rents have fallen by at least an equivalent amount.

The news wasn't much brighter in Mackay which racked up a third year of declines, and the Central Highlands saw land values fall for a fourth year, while Rockhampton saw land prices fall by 8.7 per cent from the preceding valuation date.

Townsville has also recorded moderate declines across the last five years.

There were bright spots, though, with the Gold Coast recording another year of recovery, and land prices notching up solid gains in Brisbane City Council (BCC), with the usual variances at the suburb level.

It is wise to exercise caution in interpreting suburb level median land values, not least because the Queensland Government rather likes to see those rateable land values rising for all-too-obvious reasons (though rates aren't based only on land valuations, the Government assures us!).

Changes in land use resulting from the BCC 2014 City Plan may also potentially skew the results in suburbs with increasing multi-unit development, for example.

Nevertheless, the figures are well worth a look, for the Valuer-General's figures logically cannot diverge too far from the reality over the long run.

Residential land values increased across some 132 Brisbane suburbs over the past year according to the 2017 report, although there were some declines in commercial and industrial valuations on the city fringe, according to the Valuer-General.

Over the past couple of years the greatest dollar value increases have largely been seen in the inner suburbs where land values are highest.

The following suburbs, for example, saw their median residential land values increase by $100,000 or more in only two years: New Farm, West End, Windsor, Wooloowin, Newmarket, Holland Park, Albion, Kedron, Annerley, Wilston, Carina Heights, and Carindale.

A vast wave of Chinese money has also seen Sunnybank and Sunnybank Hills notch outlandish increases in land values since 2014, the pocket known as Brisbane's "Little Asia".

The largest two-year gains in percentage terms have been driven by a popular school catchment, however.

Suburbs located within the Mansfield State High School (SHS) catchment saw land prices rise by between 37 and 43 per cent over the two-year period, including in the suburb of Mansfield itself, Wishart, Mackenzie, and Upper Mount Gravatt.