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'.

Thursday, 13 July 2017

Housing supply dashboard

Dashboard check

Over the year to March 2017 Victoria delivered an impressive 66,085 new dwellings, 31,337 of which were attached dwellings of one sort or another. 

Yet annual population growth has exploded to +146,600.

In short, you can basically forget any chance of an oversupply in Melbourne until population growth comes down from the stratosphere. 

It's not happening, and indeed Melbourne's vacancy rates appear to be approaching decade lows.

Different dynamics

Annual population growth has ramped up in New South Wales too at +116,400.

But with 64,824 new dwellings delivered over the year this crude ratio has shifted favourably towards the supply side after ten years of relative under-building in Sydney.

With some 82,836 dwellings under construction across New South Wales there's plenty more to come too, in spite of dwelling starts now finally having passed their peak

Despite being a more diverse state - as well as being home to traditional boom/bust markets such as the Gold Coast - Queensland has followed a similar pattern. 

The Sunshine State delivered 46,469 dwellings over the year through a period where population growth had slowed dramatically following the peak of resources construction boom in 2012. 

Although population growth has now picked up in Queensland and dwelling starts are apparently slowing to a crawl, it's clear that an oversupply of new dwellings is writ large.

The number of dwellings under construction has been in decline since September 2016, with 37,624 dwelling units 'live' as at the end of the first quarter of 2017, and new starts have slowed dramatically, so the market is in the process correcting itself.  

Notably, 28,391 of the dwellings under construction were of the attached variety, reflecting the super-boom in apartment construction up north. 

Of course these models aren't intended to be anything other than a crude dashboard, but are a simple display of the apartment oversupply that faces parts of inner city Brisbane.

Finally, Western Australia saw the completion of 28,535 dwellings in 2016, yet population growth slowed sharply to 16,835, illustrating what can happen to population growth in an economic slowdown.

Population growth appears to have bottomed out in WA in line with a number of other indicators, but there is now a clear oversupply of dwelling stock to be absorbed.