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).

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 is 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 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'.

"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 of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, MacroBusiness.

Thursday, 29 September 2016

Net worth increases to $8.9 trillion

Record wealth

Land and dwellings drove the gains in household wealth this quarter, increasing by $112 billion, more than erasing declines in the preceding quarter of $58.5 billion. 

Financial assets also increased in the June quarter, up by $90.8 billion, largely driven by improving superannuation and pension fund balances. 

Australian household net worth increased by 2.7 per cent over the quarter and 5 per cent over the financial year to $8.89 trillion.

Cash and deposits increased to $997 billion or 22.4 per cent of financial assets, suggesting some reticence to spend and invest.

Of superannuation and pension assets, cash holdings are well above their long term averages.

After accounting for household liabilities of more than $2 trillion, this takes the average net worth per capita close to ~$369,000. Incredible by anyone's measures.

Australians have never been wealthier. Almost nobody in the world has for that matter.

Residential assets

Not all residential property assets are owned by households, of course, but around $5.74 trillion worth are. 

Thanks to interest rate cuts in May and August, the interest payable to income ratio declined to 10.3 per cent, and will decline again in the next quarter too. This index is now a third below the June 2008 peak of 16.4 per cent.

Finally, the ratio of mortgage debt to residential property assets declined to 28.6 per cent. 

However, with fewer first homebuyers buying for cash and more incumbent owners drawing equity, this ratio is certain to rise over the next decade. 

The ratio of total debt to total assets declined to 20.1 per cent.

The wrap

You can easily see the disruptive impact the macro-prudential controls had on the housing market towards the end of 2015 and in early 2016. 

By June 2016, dwelling prices were rising again, and this has continued into the September quarter.