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 30 June 2024

2-Sense podcast: Will the RBA hike interest rates again in August?

2-Sense podcast

This week Batesy and I discussed whether the Reserve Bank of Australia will hike interest rates again in August, and much more.

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


You can also watch on YouTube here:


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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 well over 50,000 audio downloads per month, and growing fast.

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 some 3.7 million hits here

You can also catch up with me daily on Twitter here, where I'm active daily and have over 14,300 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 28 June 2024

Job vacancies down -26pc from highs

Job vacancies ease further

Job vacancies fell by another -10,000 over the three months to May 2024.

Over the course of two years, job vacancies have pulled back from a record high of around 475,000 to about 353,000, for a drop of -26 per cent from the peak. 


Although job vacancies seem to remain elevated, in the context of a labour force which has exploded in size to 14.9 million, the weakening trend points to the unemployment rate heading to 4½ per cent, and then likely higher over the year ahead. 


The number of unemployed persons per job vacancy has increased from a record low of under 1.1 (!) to 1.7 over the past 7 quarters. 


At the state level, job vacancies have declined significantly from their highs in New South Wales (-47,000), Victoria (-39,000), and Western Australia (-25,000), in particular, with Queensland down -19,000. 


Overall, the labour force figures are weakening and conditions are loosening.

SEEK's advertisements figures point to a probable faster increase in unemployment, while SEEK's advertised salary index increased by only +0.2 per cent last month, and +0.8 per cent over the past quarter, confirming that wages growth is also likely beyond its cycle peak. 

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Temporary visa numbers remained close to record levels in May, excluding visitors.


Rental markets are experiencing some temporary respite at the moment, as international student numbers are lower in the middle of the year.

History shows that student visa numbers will likely be much higher over second half of the year, so although more applications are being rejected, we'll see record high temporary visas numbers of approaching 3 million by early 2025. 

Population growth in Australia last year was +651,200, shattering the previous record high set in 2022 of +544,200.

Housing supply is locked in stalemate as the potential for interest rate cuts has been pushed further and further out until 2026, and APRA appears to be in no rush to cut lending assessment buffers either. 

Meanwhile population growth continues apace, building up the pressures. 

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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 well over 50,000 audio downloads per month, and growing fast.

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 some 3.7 million hits here

You can also catch up with me daily on Twitter here, where I'm active daily and have over 14,200 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 27 June 2024

Restrictive financial conditions, but...

Holding the line

The Reserve Bank of Australia's Christopher Kent made the case for monetary policy being sufficiently restrictive in a banking conference speech this morning in Melbourne.

After a period of stimulatory policy, the cash rate target is now at a level at 4.35 per cent, which is some way above the estimated nominal neutral rate. 


Scheduled mortgage repayments have increased to a record 10 per cent of household disposable income.

However, there's also far less consumer credit now than there was in 2008, which has cushioned the blow somewhat, reported Mr. Kent.

Payments into offset and redraw accounts have broadly continued along a similar path as before.


Household gross saving rates have been crushed lower by interest rate hikes, as one might expect... 


...and with more borrowers struggling to repay mortgages, housing loan discharges suggest more property owners are selling up to reduce debt exposures. 


In summary, then, financial conditions are pretty restrictive then. 

Concluded the said speech:

Source: Reserve Bank of Australia

We can see all of this in five consecutive quarters of negative GDP growth in per capita terms, very weak household consumption figures, and tumbling building approvals at the lowest level in well over a decade.

In other news, APRA's John Lonsdale delivered a speech today opening up the debate on whether the banking industry has become too risk averse, unnecessarily cutting off access to credit. 

You can read it here

It's something we've chatted about on blogs and podcasts quite a lot over the past year, with a significant dwelling shortage banking up (well, there are numerous tent cities out there, let's be honest) and credit extremely tough to come by for many borrowers, with a 3 percentage points assessment buffer being used as a stress test for anyone wanting to buy or build a home. 

Lonsdale made some good points about the benefits of additional regulation. 

But while tighter regulations have been beneficial over time - with interest-only lending annihilated since 2017, and banks are now very well capitalised, which is an amazing development - it's hard to believe that stress-testing borrowers at 9½ per cent assessment rates is adding much value at this point in the cycle (personal view). 

Most often mortgage arrears are caused by loss of employment rather than rate hikes, although granted, of course, the past few years has seen a period of extraordinary volatility. 

Monthly inflation sticky

Two year ago, Australia saw the introduction of a monthly inflation gauge by the Australian Bureau of Statistics.

It's a new gauge, it doesn't cover the full inflation basket, and commentators regularly caution about mapping across monthly figures to the official quarterly inflation data due to its limited coverage.

Of course, everyone just goes ahead and does so anyway, and although monthly 'inflation' was actually slightly negative in May 2024, there was a big negative reading dropping off the annual reading, taking the year-on-year inflation back up figure from 3.6 per cent to 4 per cent. 

For the next 4 months consecutively, the opposite will be true for the annual inflation figure, meaning that by the September figure annual inflation will soon be down to around 3 per cent or below.

That having been said, the trimmed mean inflation figures in today's release did look sticky, so the quarterly inflation data to be released on 31 July will be watched extremely closely to see whether the Reserve Bank needs to tap on the brakes again in August.

The annual inflation figure of 4 per cent was largely due to large increases in electricity prices and rents. 

The government is firing off a range of new cost of living subsidies for the new financial year to push down headline inflation mechanically, but still the RBA will want to see core inflation trending back down towards the 2 to 3 per cent target for peace of mind.

I can't analyse the monthly inflation data better than the king of ausbiz commentary James Foster, so I won't even try...and you can read his excellent summary here

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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 well over 50,000 audio downloads per month, and growing fast.

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 some 3.7 million hits here

You can also catch up with me daily on Twitter here, where I'm active daily and have over 14,200 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.

Wednesday 26 June 2024

Podcast mini-series: How to build a powerhouse property portfolio (Episode 10)

Monthly inflation

After a quiet start to the week, Wednesday morning will see the release of the latest monthly inflation data in Australia. 

The monthly inflation figures don't cover the full basket of goods and services, but serve as a handy indicator for where quarterly inflation might be heading.

Inflation is set to be negative in May, however a significant -0.4 per cent drop in May 2023 is also due to drop off the annual figures, meaning that over the year inflation will likely tick up to 3.8 per cent.

Partly thanks to a range of cost of living and energy subsidies as well as lower fuel prices, headline inflation is likely to under 3 per cent later in 2024, though there's a decent chance we end of going back above 3 per cent next year as the subsidies roll off again. 

Buy Right Book

In Episode 10 of our podcast mini-series, Cate and I discussed how to build a powerhouse property portfolio.

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


Don't forget to buy your copy of our new book here or here, or in any good bookstore or airport store, and send us your pics when you have a copy in you hands. 

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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 well over 50,000 audio downloads per month, and growing fast.

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 some 3.7 million hits here

You can also catch up with me daily on Twitter here, where I'm active daily and have over 14,200 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.

Sunday 23 June 2024

2-Sense podcast: Should government act as referee, or as active player?

2-Sense podcast

We had well over 50,000 audio downloads on the Australian Property Podcast last month - thanks so much for joining along. 

Chris is back from his travels to Bali, and this week on the podcast we discussed all the recent government announcements as they relate to property markets, and much more besides.

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


You can also watch on YouTube here:


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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 well over 50,000 audio downloads 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 well 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 14,200 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 22 June 2024

Lending remains tight; rental crisis to continue

Lending remains tight

Borrowers have been walloped by the ongoing increase in mortgage rates.

Although it seems that interest payments have only increased to a manageable level, this doesn't reveal the full picture. 


Less than a decade ago, almost 40 per cent of mortgages by value were on interest-only terms.

In the first quarter of 2024, the share of loans on interest-only terms fell to another record low of just 11 per cent, as the squeeze continues. 


After accounting for principal repayments therefore, mortgage repayments have steepled higher, and mortgage arrears are rising quite quickly now, up to 1.6 per cent for 30+ day mortgage arrears by the first quarter of 2024, with more to come as mortgages continue to reset to higher rates. 

The regulator APRA monitors various forms of 'riskier' lending, all of which are at now tracking at considerably lower levels than they've been historically. 


While other countries are now seeing incomes running at a much higher annual rate than inflation, Australia stayed locked down for longer and we aren't there yet.

Structural budget deficits both at the Federal and State level in Australia haven't helped with the inflation battle, it must be said. 

Eventually disposable incomes will begin to rise, as inflation falls back to below 3 per cent at the end of 2024. 

Even still, debt to disposable income ratio has fallen back to 1.85x, and has been easing over recent quarters. 


Borrowers are still being stress-tested with a 3 percentage points lending assessment buffer, even though financial markets are pricing for lower interest rates through the course of 2025. 

In the meantime, housing starts are unlikely to keep pace with population growth, and thus the rental crisis remains far from resolved. 

---

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 18 June 2024

New home sales revert lower (HIA)

New home sales declined in May

New home sales fell -12.6 per cent in May, the preceding month having experienced a pull-forward due to forthcoming regulatory changes. 


Source: HIA

The Housing Industry Association noted how rising costs and high interest rates continue to hold down new housing supply.

Barriers to housing supply were discussed in their media release here.

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The Reserve Bank of Australia kept interest rates on hold today as expected at 4.35 per cent.

The hawkish media discussion probably won't do much for confidence in the struggling homebuilding sector. 

---

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.

Monday 17 June 2024

A time to sell? (Podcast)

API Podcast

Cate and I joined Aaron-Christie David on the Australian Property Investment podcast to discuss if and when there's a time to sell property investments.

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


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ANZ released it job advertisements index, which showed ads continuing to fall, to be down -8.2 per cent from a year earlier.


Source: ANZ Indeed

The index has declined -24 per cent from the November 2022 peaks, and points to rising unemployment ahead.


ASIC's latest data also show insolvencies continuing to rise:


Source: ASIC, Shane Oliver, AMP

There are more construction sector insolvencies on the way, a surge of constructions sector of sole traders reportedly on the brink of mortgage default, according to Equifax. 

New Zealand's economy, meanwhile, is imploding, pointing to imminent rate cuts. 

Overall, it looks like monetary policy is doings it job, if not a little too well. 

Australia's Reserve Bank is set to keep interest rates on hold tomorrow, with a couple of interest rate cuts priced in by futures markets in 2025. 

Sunday 16 June 2024

Buy Right Investing: Episode 9 - Bidding and negotiating

Buy Right podcast

In Episode 9 of our podcast series, Cate and I discussed bidding and negotiating.

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


You can buy our book at AmazonDymocks, from our publisher Major Street, at airport stores, and all other good bookshops! 

You can join our free Facebook group here for upcoming offers, and follow along at our website here:

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.