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'.

Saturday, 9 December 2017

First homebuyers take the baton

Non-banks up to the plate

The total seasonally adjusted value of housing finance increased by +0.6 per cent to $32.5 billion in October 2017, led by a modest +1.6 per cent increase in investment loans. 

Industry data and polled economists had predicted a weak or very weak month for housing loans in October, but it appears that they failed reckon with the strength in non-bank lending, which has begun to kick in quite hard.

In the event there were 55,406 owner-occupier commitments in the month, above even the expectation of even the most optimistic of forecasters.

That makes it 4 consecutive months with more than 55,000 commitments, showing that home loan demand remains strong.

Of the mainland states, Victoria has by far the strongest homebuyer market.

Average loan sized are creeping up again for non-first homebuyers at $380,300, up from $370,900 a year earlier, but have stalled for first homebuyers as serviceability constraints bite. 

Investment lending ticked up a little in October too, but drilling the trendlines through the figures to smooth out the noise shows that the total value of investor activity is about 6 per cent lower than a year earlier.

Piecing it all together, total housing finance has been pretty robust, coming it at a solid $32.8 billion in trend terms - if there's been any cooling in the market, it may relate as much to muffled overseas investor interest as it does to the domestic market.

Moody's reported that it expects to see only a moderate increase in mortgage delinquencies in 2018, and this appears to be borne out by these figures, with refinancing activity some 11 per cent lower year-on-year.

Financing for new dwellings is tracking at extremely high levels, with the trend result hitting the highest level since Boney M was at number 1 in Australia with Rivers of Babylon in July 1978.

Ye-ah, we wept.

First homebuyer takeover

First homebuyers accounted for 17.6 per cent of finance commitments, up from 17.4 per cent in September, with lending to first homebuyers up by a thumping 38 per cent over the year as government incentives draw in new buyers. 

There has clearly been a sharp increase in first homebuyer activity in New South Wales and to a somewhat lesser extent Queensland.

But it's Victoria that's really driving the way forward, with its 3,250 financing commitments being the highest monthly result since 2009. 

That's upbeat news for turnover in Melbourne, Geelong, and some other regional housing markets in Victoria.

The wrap

Overall, a solid result, in terms of both the volume and value of housing finance written.

So it looks as though 2018 will kick off with the now-familiar "surprisingly resilient" articles.