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'.

Friday, 11 July 2014

First homebuyer data incomplete...

Today's Housing Finance data from the Australian Bureau of Statistics revealed some excellent news for housing construction, with the number of loans for the construction of dwellings hitting a 52 month high.

Meanwhile, the housing finance figures in detail revealed a market which continues to be very strong, with the total value of investor loans ripping up to new record highs on a rolling annual basis.

I will upload my chart pack later to show the results in detail.

Unfortunately we have had to endure a couple of years of gross misinformation about "an entire generation of first homebuyers" being "locked out" of the housing market by "greedy speculators".

This is all old ground, but in short an entire generation of first homebuyers obviously never was locked out, and in fact, in many instances the speculators in question were in fact first-time buyers themselves.

As we said all along, you have to listen to what the data is actually telling you and analyse it critically.

You also have to use your on-the-ground experience, which never once suggested to us that younger people as an entire generation were wilfully ignoring the housing market.

On many occasions they have been buying investment properties instead of a place of residence, but they are still there.

With interest rates at record lows and only low deposit requirements, why wouldn't they be?

In any case, how could prices be rising strongly if an entire sector of the market was inactive?

It obviously never made any sense at all.

I've variously explained the reasons for the confusion arising, including here, and here, and here, and here, and here, and probably lots of other places too.

But then, praise be to heaven, look what the ABS finally reported today:

"An investigation is underway to evaluate the robustness of estimates of loans to first home buyers.

In collecting this information, lenders are asked to report all loans to first home buyers. 

Concerns have been raised that under-reporting could occur if some lenders were only able to accurately report on those buyers receiving a first home buyer grant..

Most data on first home buyers are collected by the Australian Prudential Regulation Authority (APRA) under the Financial Sector (Collection of Data) Act 2001. APRA is contacting lenders on behalf of the ABS to investigate whether lenders experience any difficulties reporting on loans to first home buyers. The outcomes from the investigation will be published on the ABS website."

If you consider the likely terms of reference of the investigation, it seems doubtful that anything will come of it.

In short, APRA will phone the lenders, the lenders will say "no issues here, guv" (as indeed, one would), and that will likely be the end of that.

But at least both the Reserve Bank of Australia and the ABS have now at long last acknowledged the issue, and not before time, one might add.