Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), and 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 is 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 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'.

"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, 31 May 2014

May

Sell in May...?

Next week, RP Data will release its monthly property price figures for May, which will record declines for the month across every capital city. 

Some of the weekly media reporting of dwelling prices has progressed to beyond farcical, perhaps an inevitable consequence a greater volume of data. 

Anyways, the RP Data index has a history of recording declines in May for the reasons that are well explained here.

Posted Image


Strange to quote a chat forum as a source? Not at all! 

Plenty of the contributors have easily been consistently more accurate across a wide range of issues and have made far more sense than some of the hysterical expert commentary. More than that, they've frequently shown a superior understanding of data and trends too.

RP Data - May figures

Below is what RP Data will report for dwelling prices for the month of May, for the last quarter, and for the last year.

That is, declines across each capital city, including a huge decline in Melbourne of well over 3% which presumably reflects a few well overcooked results in preceding periods, though time will tell.

The green annual figures telling you most of what you need to know, which is that Sydney's property markets have been the strongest of the major capital cities over the past year, and Adelaide's markets have continued to remain the most subdued (click chart):


On a related note, I've observed that some have been trying to push the line that Adelaide is the "strongest" property market based on some serious cherry-picking of a couple of weeks of data. 

Now I'll agree that it does appear to be the case that some of Adelaide's property market fundamentals have been aligning with supply tightening and vacancy rates have been falling.

But it's also true that the local economy has continued to look disconcertingly weak comparatively speaking, and the state of South Australia has barely added any jobs on a net basis for more than half a decade now.

I don't doubt that over the short term Adelaide can show a dwelling price growth spurt while interest rates are stuck at record lows.

But when comparing the market fundamentals, the state's population growth or the employment growth of South Australia to elsewhere, there appears to be a question mark against almost every metric you may care to choose.

Always remember that property investment should be a long term game. A couple of weeks data is totally meaningless and it's important to see the bigger picture. 

I've copied just a few metrics from my chart pack below. Interpret as you will with regards to South Australia's population growth and employment growth:





5 year residential property indices

As always when it comes to daily property price indices there will necessarily be noise, so remember to look at the longer term ABS data in addition in order to draw your conclusions (click chart):