Pete Wargent blogspot

PERSONAL/BUSINESS COACH | PROPERTY BUYER | ANALYST

'Must-read, must-follow, one of the best analysts in Australia' - Stephen Koukoulas, ex-Senior Economics Adviser to Prime Minister Gillard.

'One of Australia's brightest financial minds, must-follow for accurate & in-depth analysis' - David Scutt, Markets & Economics Editor, Sydney Morning Herald.

'I've been investing 40 years & still learn new concepts from Pete; one of the best commentators...and not just a theorist!' - Michael Yardney, Amazon #1 bestseller.

Sunday 16 June 2024

2-Sense: Cameron Kusher from REA Group on the housing cycle

2-Sense

Excited to welcome Cameron Kusher, Director or Economic Research at REA Group - back onto the show to talk housing supply and the market cycle.

Tune in here (or click on the image  below):


You can find the podcast at all the usual hosting places.

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If you want to join my free webinar next week on Friday June 21 at 7pm send an email with "Yes" in the title to petewargent@gmail.com and we'll shoot an invite over. 

---

P.S. Whenever you’re ready…here are 5 ways I can help you manage your own money and go next level wealth:

  1. Boom or Bust – 20 minute online workshop for investors

Register for my next free online training - Boom or Bust? How to change your investment plan - book in here

You also download a free copy of my e-book The Only 6 Ways to Become Wealthy here.

    2. Download our property buying guide

Download our free property buying guide here

You can also check out a few of our recent property investment purchases here

Get in contact with us today if strategic property investment is your thing. 

    3. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 32,000 unique listeners per month.

And our popular Low Rates High Returns Show also remains available on Spotify.

    4. Subscribe for my free daily blog

Subscribe for my free daily blog with over 3.6 million hits here

You can also catch up with me daily on Twitter here, where I'm active daily and have over 14,000 followers. 

By the way, I'm a 7-times published author on finance and investing, so you can check out some of my books here.

My new book, co-authored with Cate Bakos is available to pre-order here or on Amazon here - follow our book release and forthcoming release on Facebook here and at our Buy Right podcast series here

5. Work with me privately

For a limited time you can book in a free diagnosis call with me here, so book in a call today.


Saturday 15 June 2024

Homebuilders walloped again

Prices and pressures

Completing a trifecta of softer price data from the US this week, both import prices (-0.4 per cent) and export prices (-0.6 per cent) declined in May, partly due to lower fuel prices, keeping the annual increase in the import price index low at 1.1 per cent. 

Source: BLS

Even with some very solid employment figures Down Under this week, Australia's 3-year bond yield declined to 3.82 per cent, as low as we've seen since 10 April. 


Despite this, cost pressures in Australia have not declined everywhere.

The below chart from CBA and Macrobond shows what's happened to output prices for residential construction costs since 2020, and it's not good. 

The increase has arguably been more severe for medium-density projects, with costs reportedly up by more than 50 per cent. 

The latest ASIC figures showed a decade-high of 2,643 construction company insolvencies over the past year, with more inevitably in the post. 


Source: ASIC

This week, Fairfax reported a coming 65 per cent increase in insurance costs for new homebuilders in Victoria, effectively doubling the premiums to be charged in the space two years. 

The Teals unsurprisingly (albeit incorrectly) blamed the increase on climate change, while the Greens are calling for a range of wild changes to housing market policies, none of which are going to do anything helpful for new housing supply.

It increasingly feels like 2024 and 2025 will be very disappointing years for construction and housing supply, with rising unit prices eventually driving a supply response in 2026 and 2027. 

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If you want to join my free webinar next week on Friday June 21 at 7pm send an email with "Yes" in the title to petewargent@gmail.com and we'll shoot an invite over. 

---

P.S. Whenever you’re ready…here are 5 ways I can help you manage your own money and go next level wealth:

  1. Boom or Bust – 20 minute online workshop for investors

Register for my next free online training - Boom or Bust? How to change your investment plan - book in here

You also download a free copy of my e-book The Only 6 Ways to Become Wealthy here.

    2. Download our property buying guide

Download our free property buying guide here

You can also check out a few of our recent property investment purchases here

Get in contact with us today if strategic property investment is your thing. 

    3. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 32,000 unique listeners per month.

And our popular Low Rates High Returns Show also remains available on Spotify.

    4. Subscribe for my free daily blog

Subscribe for my free daily blog with over 3.6 million hits here

You can also catch up with me daily on Twitter here, where I'm active daily and have over 14,000 followers. 

By the way, I'm a 7-times published author on finance and investing, so you can check out some of my books here.

My new book, co-authored with Cate Bakos is available to pre-order here or on Amazon here - follow our book release and forthcoming release on Facebook here and at our Buy Right podcast series here

5. Work with me privately

For a limited time you can book in a free diagnosis call with me here, so book in a call today.

Friday 14 June 2024

Unemployment rate eases to 4pc

Labour market clings on

There was a huge range of forecasts for the wildly volatile employment figures in Australia yesterday, with gains expected to be anywhere from an unlikely negative reading to +107,000.

In the event the increase was a bit better than the market median forecast, with employment growth +39,500 to a record high 14,355,100 employed persons in May. 

The numbers have been bouncing around a bit, and the 3-month average gain fell sharply from +51,000 to +24,000, which does suggest gradually loosening labour market conditions.


This was enough to hold the unemployment rate down at 4 per cent.


Generally, the labour market has been loosening, with the trend in underemployment and underutilisation rate rising of late, and wages growth now easing. 

Job advertisements indices have also slowly been coming back down to earth through the course of the year to date.

Hours worked fell -0.5 per cent for the month of May, following on from a -0.2 per cent decline in April, perhaps hinting at a slightly weaker report than implied by the headline jobs numbers (the ABS reported that more workers were calling in sick last month). 

Overall, this was a pretty good result, with fears of a spike in unemployment not yet coming to pass. 

In the US, the Bureau of Labor Statistics reported that producer prices for final demand outright declined in May (-0.2 per cent), with prices for final demand goods down -0.8 per cent, taking bond yields down a little further as the 'immaculate disinflation' narrative gains a bit of ground. 

James Foster ran through the key details of the jobs figures here

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If you want to join my free webinar next week on Friday June 21 at 7pm send an email with "Yes" in the title to petewargent@gmail.com and we'll shoot an invite over. 

---

P.S. Whenever you’re ready…here are 5 ways I can help you manage your own money and go next level wealth:

  1. Boom or Bust – 20 minute online workshop for investors

Register for my next free online training - Boom or Bust? How to change your investment plan - book in here

You also download a free copy of my e-book The Only 6 Ways to Become Wealthy here.

    2. Download our property buying guide

Download our free property buying guide here

You can also check out a few of our recent property investment purchases here

Get in contact with us today if strategic property investment is your thing. 

    3. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 32,000 unique listeners per month.

And our popular Low Rates High Returns Show also remains available on Spotify.

    4. Subscribe for my free daily blog

Subscribe for my free daily blog with over 3.6 million hits here

You can also catch up with me daily on Twitter here, where I'm active daily and have over 14,000 followers. 

By the way, I'm a 7-times published author on finance and investing, so you can check out some of my books here.

My new book, co-authored with Cate Bakos is available to pre-order here or on Amazon here - follow our book release and forthcoming release on Facebook here and at our Buy Right podcast series here

5. Work with me privately

For a limited time you can book in a free diagnosis call with me here, so book in a call today.

Record population growth in 2023 (continues in H1 2024)

Population boom

The ABS released its latest population figures up to the end of 2023, which just hinted at a possible peak in the growth rate for the estimated resident Aussie population.

Over the course of 2023 the population increased by a record +651,200 (or +2.5 per cent).

Source: ABS

Some of the fastest population growth in the country has been seen in south-east Queensland, and especially Western Australia, where the population has surged by a massive +3.3 per cent in one year.

Tasmania recorded the slowest population growth, its affordability advantage having been eroded by the preceding housing boom.


Over the year, Victoria (+186,500) and New South Wales (+185,500) recorded the largest absolute increase in population, followed by Queensland at +141,400.


Source: ABS

The population clock was just reset slightly lower from around 27.3 million to 27,269,000, as I write this. 

The assumed population growth rate of one additional person every 47 seconds still prices in population growth of  (well) above +650,000 for 2024, however.  


Source: ABS

Gradually year-on-year population growth should slow as the government aims to disrupt the pace of student visa issuance. 

Unfortunately, there's little chance of a pick-up in the speed of homebuilding in the imminent future.

The Age reported that new home builders in Victoria will see a +65 per cent increase in insurances to cover the costs of major developer collapses, following on from a +43 per cent increase a year earlier. 

Meanwhile, Victoria's green lobby seem to be hell-bent on pushing through some extraordinary proposals to stymy investor activity, which will, I fear, end in a disastrous outcome for Melbourne's renters. 

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If you want to join my Free Webinar next week on Friday June 21 at 7pm send an email with "Yes" in the title to petewargent@gmail.com and we'll shoot the details over. 

---

P.S. Whenever you’re ready…here are 5 ways I can help you manage your own money and go next level wealth:

  1. Boom or Bust – 20 minute online workshop for investors

Register for my next free online training - Boom or Bust? How to change your investment plan - book in here

You also download a free copy of my e-book The Only 6 Ways to Become Wealthy here.

    2. Download our property buying guide

Download our free property buying guide here

You can also check out a few of our recent property investment purchases here

Get in contact with us today if strategic property investment is your thing. 

    3. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 32,000 unique listeners per month.

And our popular Low Rates High Returns Show also remains available on Spotify.

    4. Subscribe for my free daily blog

Subscribe for my free daily blog with over 3.6 million hits here

You can also catch up with me daily on Twitter here, where I'm active daily and have over 14,000 followers. 

By the way, I'm a 7-times published author on finance and investing, so you can check out some of my books here.

My new book, co-authored with Cate Bakos is available to pre-order here or on Amazon here - follow our book release and forthcoming release on Facebook here and at our Buy Right podcast series here

5. Work with me privately

For a limited time you can book in a free diagnosis call with me here, so book in a call today.

Thursday 13 June 2024

Inflation comes in at...zero (risk on!)

Core inflation decelerates

Market hearts will be set a-flutter by this news, with US inflation coming at precisely 0.0 per cent in May, which was obviously lower than market expectations.

The index for shelter still rose +0.4 per cent, but given that it lags so much these pressures will continue to decline over the remainder of 2024, helping to keep pushing core inflation lower.


Source: Bureau of Labor Statistics

Over the year, headline inflation slowed to 3.27 per cent.

Core inflation also came in lower than expected at 0.2 per cent for the month, and slowed to 3.4 per cent (now well down from 6.2 per cent in September 2022). 

It's the lowest level of core inflation since April 2021, and as you can see from the red line below, the trend is clearly lower. 


Annualising the last 3 months, the headline rate drops to just 2.8 per cent, and core inflation to 3.3 per cent. 


Bond yields dropped significantly, including in Australia, and risk assets will love this. 

The US 2-year bond yield initially plunged 16 basis points to under 4.7 per cent, for the biggest daily rally of 2024 to date.

Markets are now pricing two interest rate cuts in the US by the end of the year, and no doubt Powell will try to talk down any prospect of imminent rate cuts in the afternoon presser.

Risk on time…

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P.S. Whenever you’re ready…here are 5 ways I can help you manage your own money and go next level wealth:

  1. Boom or Bust – 20 minute online workshop for investors

Register for my next free online training - Boom or Bust? How to change your investment plan - book in here

You also download a free copy of my e-book The Only 6 Ways to Become Wealthy here.

    2. Download our property buying guide

Download our free property buying guide here

You can also check out a few of our recent property investment purchases here

Get in contact with us today if strategic property investment is your thing. 

    3. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 32,000 unique listeners per month.

And our popular Low Rates High Returns Show also remains available on Spotify.

    4. Subscribe for my free daily blog

Subscribe for my free daily blog with over 3.6 million hits here

You can also catch up with me daily on Twitter here, where I'm active daily and have over 14,000 followers. 

By the way, I'm a 7-times published author on finance and investing, so you can check out some of my books here.

My new book, co-authored with Cate Bakos is available to pre-order here or on Amazon here - follow our book release and forthcoming release on Facebook here and at our Buy Right podcast series here

5. Work with me privately

For a limited time you can book in a free diagnosis call with me here, so book in a call today.

How to buy the right property

Get Rich Slow club

Join Tash, Ana, and Cate Bakos at the Get Rich Slow Club, discussing to research and buy the right property, and much more besides.

You can watch the video here on YouTube or below:


Of course, you can also listen at Apple, Spotify, or wherever else you get your podcasts.

Towards the end of the podcast, Catherine discusses our book - which you can buy from the Amazon bestsellers list here:


You can also buy the book from our publishers Major Street, at Dymocks. airport stores, and all other good book stores. 

Wednesday 12 June 2024

Temporary respite for pressure on rentals

Net immigration elevated

Over the year to April 2024, net permanent and long-term migration into Australia remained extremely high at +488,000.

This was down very slightly from March, when net immigration was...well, also +488,000.


Dr Alex Joiner of IFM Investors pointed out that on 3-month average basis the labour market is still needing to digest an unusually large increase in the civilian population, posing a risk of rising unemployment in the second half of 2024. 


Indeed at the current pace the economy needs to add around +40,000 jobs per month to keep unemployment steady, so it may not be too long before we see an unemployment rate rising to above 4½ per cent (albeit tomorrow's data should show a still-solid 4 per cent or so reported, in seasonally adjusted terms). 

Rental seasonality

With around 2¾ million temporary visas on issue for Australia these days and a record high number of international students, the rental market is likely to be a bit more seasonal through the year than was once the case. 

The blue line in the graph below shows just how much rental demand has been darting around in recent years, given all the various disruptions to international travel.


In particular, the month of May is a quiet time for international students given the most common University and college term times, and thus we'll see more departures than arrivals in the next month's statistics.

Indeed, SQM Research has already recorded a material decline in asking rents over the past month (-0.5 per cent) for the first time since April 2020, while the rise in Central Business District vacancies with lower student demand was cited as a key reason for more rentals becoming available in May.


The 6-month trend in rental vacancies still underscores the extremely low vacancy rates in  Perth (0.6 per cent) and Adelaide (0.6 per cent), and now to a lesser degree Brisbane (1 per cent).


This monthly decline in asking rents may prove to be both temporary and seasonal, but the year-on-year slowdown does suggest another potential tick in the box for the disinflation story, given that surging rents were one of the key inflationary drivers due to chronic supply pressures. 

Cost of living blitz

Curiously, the Queensland state government has been unleashing such an insane range of cost of living announcements and measures - in a desperate attempt to save the forthcoming election in the face of dire polling - that this could even move the needle at the national level for consumer price inflation, pushing headline CPI back down to 3 per cent or lower.


Source: Queensland Labor

Of course, this doesn't mean that core or underlying inflation measures will fall in anything like the same way, but it may prove to mechanically reduce headline inflation across the financial year to 30 June 2025. 

Separately, the Queensland state government has doubled the first home owners grant to $30,000, while increasing the relevant stamp duty exemption threshold to $700,000 (and the concession phased out up to the $800,000 purchase price point). 

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P.S. Whenever you’re ready…here are 5 ways I can help you manage your own money and go next level wealth:

  1. Boom or Bust – 20 minute online workshop for investors

Register for my next free online training - Boom or Bust? How to change your investment plan - book in here

You also download a free copy of my e-book The Only 6 Ways to Become Wealthy here.

    2. Download our property buying guide

Download our free property buying guide here

You can also check out a few of our recent property investment purchases here

Get in contact with us today if strategic property investment is your thing. 

    3. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 32,000 unique listeners per month.

And our popular Low Rates High Returns Show also remains available on Spotify.

    4. Subscribe for my free daily blog

Subscribe for my free daily blog with over 3.6 million hits here

You can also catch up with me daily on Twitter here, where I'm active daily and have over 14,000 followers. 

By the way, I'm a 7-times published author on finance and investing, so you can check out some of my books here.

My new book, co-authored with Cate Bakos is available to pre-order here or on Amazon here - follow our book release and forthcoming release on Facebook here and at our Buy Right podcast series here

5. Work with me privately

For a limited time you can book in a free diagnosis call with me here, so book in a call today.

Tuesday 11 June 2024

CoreLogic Chart Pack reveals growth areas

Chart Pack

CoreLogic released its latest Chart Pack, which revealed a few interesting trends. 

Dwelling prices rose +1.9 per cent over the 3 months to May, with a surprisingly strong performance across the combined regional markets (+2 percent), outpacing the capitals (+1.9 per cent). 


Source: CoreLogic

Over the year, prices were +8.3 per cent higher, driven mostly by the capital cities, especially Perth, Brisbane, and Adelaide. 


The pace of dwelling price growth in the month to early June is now the fastest since November last year. 


Listings remain low and -18 per cent below the half-decade average.

Listings have been so low for so long now that it might make more sense to look at decade averages soon.


Rents have continued to rise, but at least they are no longer accelerating.

Rental price inflation was steady for a 4th consecutive month at +8.5 per cent.


Landlords are reportedly exiting the rental markets apace in Victoria, but although rents are up strongly in Melbourne over the past year (+9 per cent) this isn't really all that much different than the rental price growth seen in Brisbane, Melbourne, and Sydney, and it's lower than the growth in rents in Perth. 

The Victorian government today quietly played down its previous announcements of 80,000 new homes per year, now admitting a shortfall and instead positing that these were only arbitrary targets anyway.

The reality is that without investors in the market medium-density construction is going to be lower.

You can download the full Chart Pack from CoreLogic here

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NAB's Monthly Business Survey showed a further deterioration in business confidence into negative territory  (down to -3) and business conditions (down to +6). 


Forward orders at -6 points to a fairly bleak outlook for the economy, and a likely need for stimulus in 2025.

Prices reversed some of their sharp declines from recent months, though the trend is still down.

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To attend my upcoming free webinar on Friday 21 June at 7pm please email "Yes" to petewargent@gmail.com

---

P.S. Whenever you’re ready…here are 5 ways I can help you manage your own money and go next level wealth:

  1. Boom or Bust – 20 minute online workshop for investors

Register for my next free online training - Boom or Bust? How to change your investment plan - book in here

You also download a free copy of my e-book The Only 6 Ways to Become Wealthy here.

    2. Download our property buying guide

Download our free property buying guide here

You can also check out a few of our recent property investment purchases here

Get in contact with us today if strategic property investment is your thing. 

    3. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 32,000 unique listeners per month.

And our popular Low Rates High Returns Show also remains available on Spotify.

    4. Subscribe for my free daily blog

Subscribe for my free daily blog with over 3.6 million hits here

You can also catch up with me daily on Twitter here, where I'm active daily and have over 14,000 followers. 

By the way, I'm a 7-times published author on finance and investing, so you can check out some of my books here.

My new book, co-authored with Cate Bakos is available to pre-order here or on Amazon here - follow our book release and forthcoming release on Facebook here and at our Buy Right podcast series here

5. Work with me privately

For a limited time you can book in a free diagnosis call with me here, so book in a call today.