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).

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.

Tuesday, 10 June 2014

RBA changes stance on first homebuyers

Strike or shift?

There's been a long-running debate about the so-called "first homebuyer strike" in Australia.

It never really made any sense, since first homebuyer numbers have remained very solid in states which have grants for first-times such as Western Australia, where 20-25% of loans written continue to be for first-timers.

Yet mysteriously FHBs had apparently disappeared in states such as New South Wales, crowded out by greedy Baby Boomer investors.

I summed up the basic issue incomplete records issue at the beginning of the year here, but note that it was raised many months before that on the chat forums

Further, as noted here as mortgage data broke new record heights, it's important to listen to what the data is actually telling you, which has not been commensurate with an entire sector of the market casually sitting on the sidelines.

There has been a shift, certainly.

First homebuyers are getting older, often buying in couples rather than alone.

Many are choosing to  buy an investment property as their first step, especially in Sydney.

But they are not "on strike", as has been claimed. 

RBA reporting

The Reserve Bank released its chart pack to the end of May last week here, and it seems that the central bank has at long last reached the same conclusion, completely stripping the first homebuyer data out of its chart pack.

Housing Loan Approvals graph

Previously, the split had been shown between owner-occupiers, investors and first-timers, but since the FHB data was both incomplete and non-sensical, a decision has clearly finally been reached to have it pulled. 

Other RBA charts show building approvals to be approaching something of a crossroads, although remaining close to record highs:

Private Residential Building Approvals graph

And dwelling prices remain in an uptrend.

Housing Prices graph

The rest of the chart pack, which you can see here makes for interesting reading as always.

In particular, note the near-exponential rate of growth in bulk commodity export volumes which are now overwhelmingly driving Australia's economic growth. 

Bulk Commodity Exports graph

With a third of Australia's annual exports by value destined for China, it's a highly leveraged play.