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'.

Wednesday, 7 January 2015

Long Slow March to Zero?

Interest rates to fall

If you were following my blog in 2014 you will recall a healthy level of scepticism that interest rates would be merrily heading higher again in 2015 as was being widely forecast at that time.

Indeed I left one of our futures markets implied yield curve charts "frozen in time" at October 3 (see below) to show just how optimistic the market was in expecting rate hikes at that time.

It has taken markets a fairly long time to come around but check out what is being priced in now - two full interest rate cuts and the yield curve remaining inverted all the way through until H2 2016.

February contracts are trading at 97.55 - essentially implying only a 1-in-5 chance of a rate cut as soon as next month - but further easing is considered to be almost a certainty by the middle of this calendar year.

While on the theme of predicting the future, our "base case" property market forecasts for 2015 were relatively moderate, but 50bps of interest rate cuts early on this year could be an obvious game-changer and would be likely to result in bumper dwelling price growth and an overshoot in some cities. 

In other interesting news, oil prices are below $50 - a good time to fill up the car. 


NASA aerial image of the Adelaide bushfires...

Source: NASA