matt75

Hi all, I am new to BE and am would appreciate any advice.
I have been living in Oz for 5 years now but recently moved from Sydney to Brisbane. Am now thinkin of Buying a house here in Brissy and was wondering what people thought of the timing of it all.
i.e Current Aus house prices vs Current exchange rate.
At the moment, the Aussie dollar it at a high, meaning its never been so bad to bring pound notes over here. I am in limbo as to what to do. Does anyone have any ideas/theories regarding what the exchange rate will do? I mean, Do I sell my property in the uk and buy here now or wait and hope the Pound improves so I get more dollars for my pound. If i do that, will i gain anything because the current trend is for house prices here are rising.
Any thought would be appreciated.

Thanks

roaringmouse

Fluctuate.

Beoz

Thoughts - well I wouldn't touch the Sydney property buying market right now with pounds. Not sure about Brissy - is it the same as Sydney? A quick internet search will reveal what you can get for your pounds in the UK and what you can get in Brissy. I think you will find value for money in the UK over Australia at the moment. The financial commetators talk about the resources boom and booms never last forever.

.... and of course this is just my humble opinion.

matt75

Thanks for your opinion Beoz. I actually already own a flat in the Uk was thinkin of selling to buy here in Brissy. The current value of my flat has gone down over the last couple of years and will hopefully rise again and I recently saw a program here in Brissy that some suburbs here were going to down. I think I may wait a while whilst keeping my eye open. Thanks for your input

Beoz

If it helps, I have read in recent times that 2011 should remain flat in the UK and an increase should occur next year, and being an Olympic year that shoud be no surprise. Property prices certainly rose in Sydney after the Olympics. It just might co-incide with a change of FX rate - you never know

Craig Vaughan

My opinion mate is that the exchange rate is not going to improve for some time. If currency values reflect the strength of different economies, i think Australia is chugging along better than most of the world. I dont see the UK or the USA digging themselves out of their respective holes anytime soon and, whilst our economy is slowing, we are still at 5% unemployment which should keep everything moving along nicely.

Anyway, like interest rates - no one really knows. I think you just have to do what is best for you on a personal level as you are really just crystal balling here. You will then look back in 5 years and be an absolute genius or a total idiot with the benefit of hindsight!

Good luck

Craig Vaughan

Weebie

financial suicide if you get it wrong.

Triumph3

I think you'd be mad to buy now.
The exchange rate is a near all time low for the pound so hang on in there, there's only one direction for the pound to go.
Exchange rates AREN'T based on economies but are based around interest rates and sentiment. There is negative sentiment in the UK (and with ex pats on here) at the moment, mainly because the glass half full people don't shut up. Manufacturing in the UK last month rose at it's greatest rate in 16 years but still the doom mongers are talking about the end of the world.
Interest rates are at a record low in the UK so there is only one way for them to go. And the pound will follow.
If Oz puts up it's interest rates, houses will become even more unaffordable.
If Oz lowers its rates, the $ will lower in value. Good economies can go bad just like Japan did not so long ago and I think Oz is teetering.
A large part of GDP for Oz is the immigrant's cash that is brought in. A lot of people aren't going there at the moment (including me) because of the $ strength.
Buying at the peak is NEVER a good idea.

Craig Vaughan

mate, exchange rates are based on how one economy is doing compared to another. It is not the only factor but the main one. Even by your assessment which I dont disagree with, they are based around interest rates and sentiment. But interest rates and sentiment are measures of how an economy is performing. USA and GB have low interest rates to stimulate the economy because they are not performing well whereas Australia has high interest rates as we are doing better - thus, exchange rates are fundamentally a measure of how one economy is doing compared to another economy.

Naturally buying at the peak is never a good idea. The problem is that no one knows when the market is at its peak or at its bottom. Even Economists, who get paid to review this stuff for a living can not come to a consensus - If you were to ask 3 economists you will normally get 3 different answers. You really just have to take your best educated guess and hope you get it right.

Triumph3

[QUOTE=Craig Vaughan;9232481]mate, exchange rates are based on how one economy is doing compared to another. It is not the only factor but the main one. QUOTE]

If that were true then the US dollar with all its subprime problems and massive, massive borrowing would have dived the most. It didn't. In fact it went from $2 to the £ to around $1.5 to the £ at one point.

NZ lowered its interest rates this week and their dollar has gone down. No other reason (earthquake or no earthquake, had NZ not lowered their OCR then the NZ$ would not have changed that much). The NZ$ has done great recently, not because their economy is improving (I've been there recently and it's quite depressing). People are leaving (mainly for Oz) in their droves.

Currencies are just another vehicle for investors to make money, the main reason the US$ stayed strong was because of sentiment and it being perceived as a safe currentcy. Certainly not because its economy is doing great!

OP, as Craig says, no three economists will ever agree, you just need to read the differing views and agree with one and make your choice.