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.

Friday, 6 June 2014

Sydney unit prices to rise 15% in 2 years

Notes BIS Shrapnel, as reported by Property Observer:

"According to BIS Shrapnel, behind the strength of the property market are low vacancy rates, low interest rates, relatively attractive yields and the expectation of capital gain.
BIS Shrapnel’s Apartments in Sydney Suburbs 2014 to 2019 report points to strong off the plan sales, which will underpin further rises in new high density apartment construction.
No oversupply is expected, but vacancy rates should ease and reduce pressure on prices “by the time the Reserve Bank starts looking at tightening interest rate policy” the report notes, suggesting that off the plan sales will come off their peak over 2016.
Senior manager and report author for BIS Shrapnel, Angie Zigomanis, said that the peak in apartment prices and sales by 2004 did result in the market being overvalued and oversupplied.
“The subsequent downturn resulted in the oversupply being absorbed by 2006/07, but it took several more years of rental growth before returns increased sufficiently for residential property to become attractive to investors again,” said Zigomanis.
“By the time interest rate policy was eased at the end of 2011, the Sydney market was coiled like a spring, and ready to take off,” he said.
“Successive cuts to interest rates continued to reduce the gap between rental income and mortgage repayments, causing investor demand to surge and drive up prices.
15% forecast increase in unit prices over the next two years
Overseas buyers’ influence was also noted by Zigomanis, noting they’ve been buying apartments within inner Sydney and selected centres.
Gen X and Gen Y are also starting to contribute, with owner occupiers’ presence growing. Notably, however, investors are still the overarching dominance in the Sydney apartment market."