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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Wednesday, 12 April 2017

More egg boxes

Sydney: last man standing

Building Activity is one of the more complicated data series released by the ABS, so I'll just post the headline figures here. 

Overall the level of residential building activity remained high, increasing quite strongly in 2016 in fact, but nationally it looks as though the peak is now more or less in. 

At the end of the year there was still a historically high number of dwelling units approved and not commenced, but Sydney was beginning to chew its way through the backlog. 

Nationally dwelling commencements remained strong in the fourth quarter of 2016 at more than 57,000 in seasonally adjusted terms.

But in reality the red hot run is now only being held aloft by Sydney, with commencements declining in Melbourne, Brisbane, and Perth. 

New South Wales saw a total of 19,950 dwellings commenced in the fourth quarter, with Victoria sliding to 16,460, and Queensland dropping sharply to 10,150.

Commencements have been falling in Western Australia for nine consecutive quarters.

Plotting the figures in trend terms shows how the residential boom is really just a Sydney story now. 

Supply coming online

At the end of 2016 there were still some 219,384 dwellings under construction, including 152,635 attached dwellings.

The total is slightly lower than the record peak seen in September 2016, indicating that new apartments were already starting to hit the eastern capital city markets towards the end of last year. 

There were a record 82,857 dwellings under construction in NSW at the end of the year, some 62,040 of them being attached dwellings, and so many of them of the 'egg box' variety.

The actual number of dwellings actually completed in 2016 were high, but themselves hardly alarming, including in NSW (58,730), Victoria (59,977), and Queensland (44,983). 

The wrap

While these are big numbers in historical terms, today's largely unnoticed arrivals and departures figures presented some food for thought, with permanent and long term arrivals exploding to 103,570 in February, by some margin the biggest single month on record.

There was also an unprecedented number of education arrivals in 2016, which may be a coincidence or driven by the lower dollar. 

On the other hand, maybe the government has quietly turned on the immigration taps.

Remember that most immigrants to Australia head to the two most populous states, which are also home to the two best performing economies and the highest number of job vacancies.   

Let's hope the new arrivals like egg boxes.