Just noticed the exchange rates getting better

[janieco]

Change the mining to banking and k.rudd to g.brown and you could be talking about the UK a few months ago. A clue to which way your election will go?

You could almost match the last 3 years of the events in the u.k. to the next 3 years in oz. :sad:

[janieco]

were looking at houses keenly at the mo , and im surprised there are quite a few that are lowering their prices ..not drastic but im thinking are they not shifting as they were. interesting ..like a client telling me the other day they are seeing people are knocking things on the head ie; in her case personall trainer ( tightening their belts as she worded it..) things that are not a neccesity.

Hi jackboots, if you are looking to purchace a property i would suggest you watch and wait. Like you have noticed there is a change occuring in the market !!! Time is on your side, many in oz smuggly think that oz is so well placed that we have had a reccession [stockmarket crash 2008] and that was it lol big surprises heading this way over the next 2 years ......like i said watch and wait :wink:

[janieco]

The reason you are seeing a reversal in the Oz $ is that it is considered a 'high-risk' currency. That is to say that Australia does not have a vastly diverse economy and relies very heavily on exporting commodities.

The trouble in the Eurozone points at a possible return to recession which would mean a decline in production in China and, ergo, a decline in commodity imports from Australia whose economic well-being is inextricably linked with China.

Coupled with this is a concern that China and those nations linked with it's annual growth rate are experiencing an asset growth bubble. Anyone who has seen the house price rises in Australia recently (they are now 50% over-valued and growing and the proliferation of Porsches appearing out of thin air and funded without doubt by debt extensions is both almost funny and worrying for a nation who already have the highest personal debt ratio in the world) will know that asset price inflation is soaring but, at the moment, offset by exporting their inflation through strong currency appreciation.

There have also been concerns raised at the exposure of the Australian banking system to home loan defaults.

 

So basically investors are concerned about the possible effects of a global double-dip recession on Australia.

 

On a side note it is worth remembering that this will have a profound effect on the UK as well as 60% of it's exports go to Eurozone countries. With debt standing at over 10% of GDP and the economy already looking fragile any gains may be temporary both on the currency exchange and in your investments (housing, savings etc)

 

It's all pretty gloomy I am afraid.

 

On the flip side, if the global economy can weather this crisis then Australia may well have a soft landing and the UK may well continue on the path to recovery.

Personally I think the Oz $ is over-valued and due a correction anyway.

Great points well made. Good to know that somebody else thinks that property is up to 50% over priced in oz. Banks know whats on the way and how expossed they are..... a realestate agent was telling me the other day that they have never had so many applications for home loans knocked back.....EVER !!!! Oh dear fasten your seat belts everyone, soft landing ??? :no:

[fleabo]

Hi jackboots, if you are looking to purchace a property i would suggest you watch and wait. Like you have noticed there is a change occuring in the market !!! Time is on your side, many in oz smuggly think that oz is so well placed that we have had a reccession [stockmarket crash 2008] and that was it lol big surprises heading this way over the next 2 years ......like i said watch and wait :wink:

 

 

Have you worked out how to open a bank account yet?:wubclub:

[Guest guest30038]

Have you worked out how to open a bank account yet?:wubclub:

 

Yep, amazing isn't it? If we all knew exactly what was going to happen, then it wouldn't happen would it? Or could it be that those who know it's going to happen just sit back and wait for it to happen, or do they post on forums such as this and finacial forums, doing their level best to put the shlts up everybody by spreading doom and gloom, in the hope that they can make it happen? Do they not learn from the previous cycles of the capitalist system? Is property not a long term investment? Are we all in the hands of speculators?

 

I better bale out now if my life is in the hands of the doomsayers.............anyone want to buy a $600,000 house for $450,000? Be quick, because I want to get back to dear old blighty before the dollar slips any further.

 

OTOH, I could stay put and consider that even if my property was over-priced by 50% I could thank my lucky stars that I would still be in positive equity based on what I paid for it 5 yrs ago and that once it does de-value by 50% (a ridiculous figure), there's only one way it will go after that.

 

I think the latter will give me more peace of mind thank you.

 

kev

[Guest chris955]

There is no doubt property is well overpriced just as it was in the UK until recently. How can a property that sold for $115,000 9 years ago and is worth $400,000 now not be considered over valued ?

 

Great points well made. Good to know that somebody else thinks that property is up to 50% over priced in oz. Banks know whats on the way and how expossed they are..... a realestate agent was telling me the other day that they have never had so many applications for home loans knocked back.....EVER !!!! Oh dear fasten your seat belts everyone, soft landing ??? :no:

[Guest guest30038]

There is no doubt property is well overpriced just as it was in the UK until recently. How can a property that sold for $115,000 9 years ago and is worth $400,000 now not be considered over valued ?

 

It's called "market forces" It's only over-priced if the market changes to it's detriment.

 

kev

[Guest chris955]

I would have thought that once property starts getting unaffordable as it is now and people are getting mortgaged to the hilt then it must be considered over priced ? As I said that is exactly what happened in the UK.

[Guest guest30038]

I would have thought that once property starts getting unaffordable as it is now and people are getting mortgaged to the hilt then it must be considered over priced ? As I said that is exactly what happened in the UK.

 

"mortgaged to the hilt" appears to be a phrase used frequently on PIO and by the media although I personally, don't know any house owner who doesn't have decent disposable income after paying their mortgage, even those who emigrated here in the last 2 years and have since bought.

 

It's only over-priced when it ceases to sell. On last month's figures, it takes on average 58 days to sell the average home, half what it did same time last year. North Brisbane is the hot spot with selling times averaging 31 days.

 

Selling time almost halves as house prices start to soar | Courier Mail

 

Auction sales fell last week so a correction may be around the corner

[Jackboots]

well they are definatly overpriced here in perth!

 

and we did hit the ..... in the uk kev our houses totally bottomed over there , its watch and wait i suppose , its ok if your not moving houses or country . good luck with your plans for the uk !

[Guest chris955]

http://www.news.com.au/money/property/house-surge-leads-to-mortgage-stress/story-e6frfmd0-1225843130252

 

Mortgage stress hits hundreds of tenants | News.com.au

 

New home sales down as mortgage stress rises for first time owners - Business news, business advice and information for Australian SMEs | SmartCompany

 

Mortgage stress awaits, if you can get a loan

[kernow43]

Hi there londongirl, well to bee honest it looks like the only chance to reverse the proposed mining tax is a change of government in the upcoming election in november i think. Literally billions of dollars have been put on hold as investors reconsider their options. I know heaps of people who have shares in mining have sold so a bit of a domino effect is not helping there. Also pension funds have taken a hit as alot of them are invested in mining. The problem as i see it [ ONLY A LAY PERSON ] is that k. rudd borrowed heaps of money to keep oz afloat and it has got to be paid back and thats the only place he can get it. The opposition government has said it would scrap all the proposed spending stuff that k.rudd said it would do, on borrowed money of course, so its a wait and see. There is talk that the mining sector will not back down and close mines here and increase output in their overseas mines and send k. rudd to the wall. He has laughed this off and said he will call their bluff!!!!! I can only hope this egomaniac is gone come the next election. By the way the property market has slowed down considerably even though the media is trying to still talk it up. So oz is in for a rough ride.:mad:its a shame as we could have been heaps better off with carefull management, especially given the examples of other countrys over the last few years........:arghh:

The selling of shares here is across the board, and it has a lot more to do with the useless European market, than Krudds mining tax.we are beginning to suffer here now. Anyway the market especially the miners was well up yesterday.As for UK, well they are well and truly stuffed!

[Guest guest30038]

House surge leads to mortgage stress | News.com.au

 

Mortgage stress hits hundreds of tenants | News.com.au

 

New home sales down as mortgage stress rises for first time owners - Business news, business advice and information for Australian SMEs | SmartCompany

 

Mortgage stress awaits, if you can get a loan

 

Chris, I have never known a time when the media hasn't reported "mortgage stress", even when property prices were considered reasonable they would still quote "mortgage stress" as being attributable to low incomes or the price of the household shopping bill. The propensity for the average consumer to whinge, spurred on by the media, never ceases to amaze me. They will be stressed if they can't buy a plasma, can't dine out twice a week........and so it goes on.

 

The "public at large" will always paint a darker picture of their finances by virtue of the fact that most housing polls are based on a tiny percentage of home owners and also by the human frailty of it's easier to have a whinge than just get on with it, as the average joe blow seems to think that by some miracle, whingeing will make things a whole lot better for them.

 

How may of those under "mortgage stress" have bought above their means whilst continuing to consume other items in the same fashion that they did prior to commiting to a mortgage? How may of them are running 2 x fourbys or other gas guzzlers?

 

"Mortgage stress" is not based on an ability to pay the mortgage but on the expectation of what the remaining income after mortgage can purchase...........an expectation that is totally unrealistic if one factored in the other debt that it takes to meet those expectations. "Mortgage stress" IMHO is based on greed, pure and simple, unless that poor person has lost their job, become ill etc.

 

My personal experience, which is why those so-called "mortgage stressees" pee me off no end, is that we have always managed on one income (that of a lowly nurse), and after 15 years in oz we are mortgage free. Times were hard, but at no time did we consider ourselves to be "mortgage stressed". We "cut our cloth" and purchased wisely, what was within our means, in all areas of our consumption.

 

The current "stress" that many like to reveal is not based on their property value but based on them committing to too big a mortgage that they should't have, in the first place if they wanted to continue the same lifestyle that they had prior to the mortgage.

 

Anyone who is without mortgage stress, is not neccessarily wealthier, but simply shops more wisely and has less of an expectation of what their remaining income can purchase. They invariably are happier and less stressed because they are realsitic, not because they are wealthy.

 

kev

[Guest Durathor]

Chris, I have never known a time when the media hasn't reported "mortgage stress", even when property prices were considered reasonable they would still quote "mortgage stress" as being attributable to low incomes or the price of the household shopping bill. The propensity for the average consumer to whinge, spurred on by the media, never ceases to amaze me. They will be stressed if they can't buy a plasma, can't dine out twice a week........and so it goes on.

 

The "public at large" will always paint a darker picture of their finances by virtue of the fact that most housing polls are based on a tiny percentage of home owners and also by the human frailty of it's easier to have a whinge than just get on with it, as the average joe blow seems to think that by some miracle, whingeing will make things a whole lot better for them.

 

How may of those under "mortgage stress" have bought above their means whilst continuing to consume other items in the same fashion that they did prior to commiting to a mortgage? How may of them are running 2 x fourbys or other gas guzzlers?

 

"Mortgage stress" is not based on an ability to pay the mortgage but on the expectation of what the remaining income after mortgage can purchase...........an expectation that is totally unrealistic if one factored in the other debt that it takes to meet those expectations. "Mortgage stress" IMHO is based on greed, pure and simple, unless that poor person has lost their job, become ill etc.

 

My personal experience, which is why those so-called "mortgage stressees" pee me off no end, is that we have always managed on one income (that of a lowly nurse), and after 15 years in oz we are mortgage free. Times were hard, but at no time did we consider ourselves to be "mortgage stressed". We "cut our cloth" and purchased wisely, what was within our means, in all areas of our consumption.

 

The current "stress" that many like to reveal is not based on their property value but based on them committing to too big a mortgage that they should't have, in the first place if they wanted to continue the same lifestyle that they had prior to the mortgage.

 

Anyone who is without mortgage stress, is not neccessarily wealthier, but simply shops more wisely and has less of an expectation of what their remaining income can purchase. They invariably are happier and less stressed because they are realsitic, not because they are wealthy.

 

kev

 

 

 

You are mortgage free because you bought a long time ago.

 

Affordability has changed in that time considerably. that is not an opinion, that is a fact.

 

Australia has the highest personal debt ratio in the world. It has the highest income to house price ratio in the developed world (higher than both the UK and the US who have both suffered corrections).

 

It is, without any shadow of a doubt, living on the never never. It makes no difference whether debt is held by a government or citizens. It is debt inevitably held on the international credit markets and, as such, has to be repaid.

 

This has been a concern in Australian society for several years, but as Keynes said 'Markets can remain irratinal longer than you can remain solvent'.

 

In other words, Australia is riding off the back of China and increasing it's debt levels (the average Australian spends in excess of $130 for every $100 they earn) on the presumption they have stumbled upon some economic miracle (sound familiar?).

 

The only questions are when and how hard the economy corrects when the debt has be repaid.

[kernow43]

You are mortgage free because you bought a long time ago.

 

Affordability has changed in that time considerably. that is not an opinion, that is a fact.

 

Australia has the highest personal debt ratio in the world. It has the highest income to house price ratio in the developed world (higher than both the UK and the US who have both suffered corrections).

 

It is, without any shadow of a doubt, living on the never never. It makes no difference whether debt is held by a government or citizens. It is debt inevitably held on the international credit markets and, as such, has to be repaid.

 

This has been a concern in Australian society for several years, but as Keynes said 'Markets can remain irratinal longer than you can remain solvent'.

 

In other words, Australia is riding off the back of China and increasing it's debt levels (the average Australian spends in excess of $130 for every $100 they earn) on the presumption they have stumbled upon some economic miracle (sound familiar?).

 

The only questions are when and how hard the economy corrects when the debt has be repaid.

Does that mean we will follow UK down the gurgler, but we will have a bit more time.

[Guest guest30038]

You are mortgage free because you bought a long time ago.

 

 

 

Wrong. We're mortgage free because we considered debt to be a millstone and worked to remove it as soon as possible. Irrespective of houses being more expensive now, we would do the same again, and possibly buy a 2 bed instead of a 4 bed if need be. As I say, there is nothing that "cutting your cloth" can't alleviate as long as you are in steady employment.

 

"Affordabilty" varies between one person's expectations amnd priorities in life, and anothers. We had/have friends who had lesser mortgages than us, more income than us, and yet said that they struggled............why? Because they expected more disposable income left in their hands after paying their mortgage than we did. We have always paid a higher percentage off our mortgage than the average person but didn't consider ourselves "mortgage stressed" because we did it by choice.

 

kev

[theonetruechris]

No offence meant kev, but...

 

Its very easy to say you'd do the same now - but its the ratio of cost of house to income thats an overriding factor. My first house in 2000 cost 3 1/2 times my salary - to buy one now even a cheap 3 bed would be 6 times my salary. Yes its Melbourne not Lincoln and yes I know some people have mortgaged themselves up to wazoo (plasmas, holidays, fourby's etc.) But its simple economics to state that houses are a lot more expensive for those joining the mortgage ladder than they used to be. I don't think you appreciate this point.

[Guest guest30038]

No offence meant kev, but...

 

Its very easy to say you'd do the same now - but its the ratio of cost of house to income thats an overriding factor. My first house in 2000 cost 3 1/2 times my salary - to buy one now even a cheap 3 bed would be 6 times my salary. Yes its Melbourne not Lincoln and yes I know some people have mortgaged themselves up to wazoo (plasmas, holidays, fourby's etc.) But its simple economics to state that houses are a lot more expensive for those joining the mortgage ladder than they used to be. I don't think you appreciate this point.

 

Yeah, I do mate. It's the words "stress" and "affordability" that pliss me off when applied to mortgages and luxury items. I don't for a minute doubt that house prices are a greater part of income than they once were.

 

Only the other week we looked at my wife's pay slip from when we took out our first mortgage here. Her take home pay was almost exactly half of what it is now. The house cost us 111k and is now selling for 350............more than treble, whilst her income has only slightly less than doubled, so yeah, I fully appreciate the enormity of the situation and what may follow by way of a decline in house prices. Like I say, I get peed off by the word "stress" when applied to over-commitment on purchases that aren't totally neccessary and to people who's expectations of life aren't realistic.

 

If folk are coming to Oz (now) for the dream of a bigger, better house, with pool, without having to forego some luxuries that they may be experiencing in the UK, or to take a step backwards financially (initially), then I would advise them that they are coming for the wrong reasons..........that dream appears to have long gone for most, and in my book, there are far better reasons for coming anyway. We've got what we came for and it isn't, and never was, the big house with pool........it's the kid's safety and prospects, the weather.........yeah the weather :biggrin: (My wife has Raynauds Syndrome) and my wife's feeling that she can nurse in the way that she always wanted to, and be appreciated for it.

 

kev

[KIRK AND CO]

Dont worry big house correction comeing soon

[Guest chris955]

I think you are right, hopefully if we decide to head back to the UK it doesn't happen before then :biggrin:

[Guest Rickard Family]

Wage to mortgage ratio is worse than that now. Back in the early 80's a friend of mine earnt £700 on price work shuttering as a carpenter in London and bought his 3 bed semi detached for £26,000. Now he earns £600 a week and his house, the same one is worth £220,000. How is anyone supposed to get a Mortgage and be stress free nowadays. It takesz more than a few cut backs on holidays and cars to be able to afford a house nowadays!

Anyway getting back to the rise in the Dollar should we panic and change up our English pounds now or wait some more, HELP please! Thanks Clinton

[Guest chris955]

Yes that is a ratio of roughly 7 times wages, about the same as an average house here. I wouldn't like to be trying to buy now.

[Guest proud2beaussie]

Guys this thread is about the fall in the Australian dollar,it is not about house prices,I realise that the last few posts have been in response to a paragraph in a post by Durathor and that is why I have allowed them to remain but that is no reason to move the main topic of the thread away from the substantive issue of the exhange rate.

From now on please stick to that issue,if you wish to discuss house prices then there are plenty of threads already in existence for that purpose or feel free to start a new one but I want this thread to focus on the exchange rate.

[Que Sera Sera]

Thanks Nigel its five weeks until we make the big move, Im hoping the exchange rate keeps getting better:jiggy::jiggy::jiggy:

[Guest londongirl]

Chris 995 I see that the dollar is going down again. Not as fast as on Friday, but still a downward trend... And everyone seems to be saying it will continue.... but then no-one really knows!