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, 18 April 2017

Vacancy rates "tumble across the nation"

Vacancy rates down everywhere

Not quite in line with the popular prevailing narrative, SQM Research reported that vacancy rates tightened across all capital cities in the month of March 2017. 

In Canberra the vacancy rate fell to just 0.8 per cent, following the seasonal spike over Christmas.

In Hobart vacancy rates are insanely low at just 0.6 per cent.

And in Adelaide the vacancy rate dropped to 1.8 per cent.

Meanwhile in Sydney the vacancy rate dropped to just 1.7 per cent, including only 1.3 per cent in the CBD, and an incredibly low 0.8 per cent in adjacent Pyrmont. 

In one of Sydney's inner western suburbs that I track, Erskineville, the vacancy rate has dropped to just 0.6 per cent. 

The most notable result of all was seen in Melbourne, where the vacancy rate has now fallen from above 3 per cent at the end of 2014 to just 1.5 per cent.

This is the lowest monthly result in the Victorian capital seen since Q2 2010, and reflects mammoth population growth which is outpacing even the high rates of construction

Even at 'high rise central' Docklands and Southbank the reported vacancy rates were not seen to be alarming. 

In Sydney and Melbourne there do remain many thousands of units under construction which will hit the market in due course. 

Vacancy rates also declined in Perth, Darwin, and Brisbane in the month of March 2017, although asking rents in Perth and Darwin are still in decline.

Smoothing the figures on a rolling 6-month basis (albeit across the period that incorporates Christmas) suggests that Darwin's market may still be struggling along for a while to come, despite a significant improvement in March. 

I know for a fact that Brisbane still has thousands of apartments under construction, because I live nearby!

Perth has been through a very tough patch, but looks as though it may be very gradually turning a corner. 

The wrap

There have been more housing market op-eds this week than you can shake a stick at, some of which even demanded that young people don't buy a home. 

I don't know if anyone takes such blanket advice at face value given that Australia has housing markets operating at different stages in the cycle, but young Melbournites might justifiably be looking at these figures with increasing alarm.

Despite widespread predictions of an oversupply vacancy rates have been trending down in Melbourne for 5½ years now, and median asking rents have begun to soar, rising by 7.1 per cent over the past year for houses, and even by 5.1 per cent for units. 

In Sydney, median asking rents for houses have risen by 12 per cent over the past three years, compared to 9.4 per cent for units. 

The Reserve Bank slipped a cheekily dovish note into its Board Minutes released today, which just inched towards the possibility of a future rate cut.