What's your prediction on the Australian Dollar?

[drsmithy]

Foreign buyers are not the major cause of increased housing prices with the exception of high end housing in Sydney and Melbourne.The real risk is that they often leave those properties empty so taking them out of available rental stock.

I think the situation here is somewhat unique in that large numbers of foreigners are dumping money into real assets to protect it. It's a preservation of capital issue.

It's not just high-end properties, either. The highrise slums-in-waiting being built all over Melbourne, marketed almost entirely to foreign markets and currently being left largely empty by their owners, are a prime example.

The real problem is that negative gearing directs investment funds into non productive assets and thereby reduces the funds available for productive investment that could increase employment opportunities.

Precisely.

 

[whatmeworry]

Can't get rid of negative gearing in its current form with so many politicians into property.

Around one in seven Australian taxpayers own rental properties, but among federal politicians it is at least one in three.
Figures compiled by property authors Lindsay David, Paul Egan and Philip Soos show federal politicians own an average 2.4 properties each, including their family homes.

Collectively they own a portfolio of 541 properties, conservatively estimated to be worth $350 million.
Barry O'Sullivan is Capital Hill's biggest property tycoon, with the Queensland Nationals senator owning 41 properties.

 

[amaroo]

What do you think happens to houses when "investors" don't buy them ? That they disappear in puffs of smoke ?

Two markets - established / new.

You're talking about one - me the other.

 

[medhead]

Two markets - established / new.

You're talking about one - me the other.

People still need somewhere to live, which will come from both markets. Why do you constantly ignore the fact that demand lost from investors can/will be taken up by owner occupiers?

 

[drsmithy]

Two markets - established / new.

You're talking about one - me the other.

That's because the context is negative gearing, and negatively geared investment in the new build market is practically zero.

 

[cove]

With the developers margin of 20 to 30 percent it is little wonder that many canny investors who are Australian avoid newly constructed apartments for negative gearing.
Now the Aussie dollar has had trades up to .8031 as the U.S. Dollar loses some of its previous gains.

 

[andye]

Well steered back on topic

 

[whatmeworry]

RBA Governor taking some heat over rising dollar despite rate cut.
Reserve Bank governor Glenn Stevens takes heat as $A rises despite rate cut

 

[Warks]

I've been invoicing an overseas company in 'dollars' for the past few years. Back when it was around parity I didn't notice much difference. After the dollar dropped I found I was getting paid a fair bit more - they thought 'dollars' meant US dollars. I wasn't going to contradict them as they were happy with the amount it seemed.

I have one more invoice to go and the difference is now several thousand dollars. I've been egging the dollar down (if that's an expression) to make a bit more but suddenly I was asked to reissue the invoice in Australian dollars! So I had to do my own exchange rate. Given that this company can take 90 days to pay it is tricky to choose an exchange rate but I went with 0.75 as that seems to be the 'traditional' average or 'natural' level. Will see what happens.

Now I want the dollar back up for our US trip in June-July...

 

[cove]

Commodities are stirring so the Aussie dollar short sellers are on the wrong side. I thought too bad seeing I am not a short seller.

 

[amaroo]

That's because the context is negative gearing, and negatively geared investment in the new build market is practically zero.

Really! All those new apartments are being purchased by owner occupiers ... pull the other one.

 

[drsmithy]

Really! All those new apartments are being purchased by owner occupiers ... pull the other one.

 

[amaroo]

View attachment 48114

View attachment 48116

Fair enough - can't argue with that.

It's a large difference ... smiling I've made my $$$$$ and existing the market. One to go

 

[NFF]

Is America going to raise its interest rate this year ?

 

[PLANT]

Yes it will!

 

[drron]

I doubt it.!

 

[Alanslegal]

Back to interest rates though; currently in AUS the official rate is 2.0% which ultimately becomes like low 4.0's% to most borrowers - and we are at record lows!

Whilst I am green with envy when I talk to family and friends in other parts of the world saying their interest rates of their borrowings are just below 1.0%.

I am paying 400% more than they are, and this is the best we could do

 

[whatmeworry]

Back to interest rates though; currently in AUS the official rate is 2.0% which ultimately becomes like low 4.0's% to most borrowers - and we are at record lows!

Whilst I am green with envy when I talk to family and friends in other parts of the world saying their interest rates of their borrowings are just below 1.0%.

I am paying 400% more than they are, and this is the best we could do

How come we have a differential of 2 percentage points? I thought the gap was smaller a decade or two before?

Seems we might get more cuts and jaw boning.
http://www.theage.com.au/business/t...-more-interest-rate-cuts-20150508-ggx0zl.html

 

[andye]

AUD has had a big drop against the GBP over last 24 hours. Glad my pension transfer is taking a little longer than expected now

 

[Flashback]

Bank of England rate here is 0.5% with rates commonly offered around the 1.5-2.5% mark. Recently saw 2.99% locked in for 10 years.