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, 16 January 2015

First Time Buyer Levels...Remain the Same

Another urban myth that has been doing the rounds for the last couple of years - that would-be first time purchasers of property have gone "on strike" and have stopped buying - comes undone.

It has been obvious for a long time to those operating in the real estate industry that first-time buyers have been often buying an investment property first.

This means that they are not captured as first-time buyers in the official data, instead being categorised as investors.

With prices rising in several capital cities those endlessly pushing the "death of the first-time buyer" meme have not been listening to what the data is telling us. 

The problem has been that until now the levels of first-time buyers who are investors have not been easily estimated.

However, Martin North has now had a crack via a survey over at his Digital Finance Analytics blog.

FTBNov2014Inv

As we have known for a long while, first-timers are indeed buying investment properties first.

Completely unsurprisingly this implies that the absolute numbers of first time buyers have barely shifted at all.

With younger folk changing jobs and even careers (and therefore shifting locations) far more frequently than has ever been the case historically, buying an investment property to hold onto instead of a home as a first move on to the property ladder can make a good deal of sense.

The notion of repeatedly moving and "trading up" is fundamentally flawed in that it attracts prohibitive "frictional costs" such as transactional stamp duty levies, mortgage transfer fees, estate agent fees, legal fees and more. 

Buying and holding an investment property is hugely more efficient and allows more flexibility, so who can blame first-timers for quite sensibly choosing that route?