What's your prediction on the Australian Dollar?

Just watched a doco on Ayn Rand and Alan Greenspan. It seems his policies in Asia and the USA helped caused property crashes in Asia and the USA which were fueled by cheap and easy credit. I wonder if Australia is headed for property bust if foreign investment stops?
 
whatmeworry said:
Just watched a doco on Ayn Rand and Alan Greenspan. It seems his policies in Asia and the USA helped caused property crashes in Asia and the USA which were fueled by cheap and easy credit. I wonder if Australia is headed for property bust if foreign investment stops?
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The Chinese economy looks like it might have a case of the wobbles...
 
whatmeworry said:
Just watched a doco on Ayn Rand and Alan Greenspan. It seems his policies in Asia and the USA helped caused property crashes in Asia and the USA which were fueled by cheap and easy credit. I wonder if Australia is headed for property bust if foreign investment stops?
Click to expand...

nah - investors buying for negative gearing can step in.

Why is it the media focuses on how bad foreign owners are, but side-steps the negative gearing issue?
 
MEL_Traveller said:
nah - investors buying for negative gearing can step in.

Why is it the media focuses on how bad foreign owners are, but side-steps the negative gearing issue?
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And what is wrong with those who negative gear? Paying too much tax now.
 
JohnK said:
And what is wrong with those who negative gear? Paying too much tax now.
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You make a short term loss, with tax deductions, in the hope that the capital gain will be large enough to cover the net losses. The said gain would come from other investors pouring their money in, hoping of achieving the same. Sounds a bit like a ponzi scheme, doesn't it?
 
Awesom Andy said:
You make a short term loss, with tax deductions, in the hope that the capital gain will be large enough to cover the net losses. The said gain would come from other investors pouring their money in, hoping of achieving the same. Sounds a bit like a ponzi scheme, doesn't it?
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That was never my intention. I paid as cheap as I could for all my investments in the hope that I would have income for life. And I have largely achieved that goal.

Superannuation was never going to achieve the same result. Not with the thieves running it.
 
Cruiser Elite said:
And to think some reports were that the jawboning was done with - yeah right!
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Surprising the governor keeps talking the dollar down and the property market down, yet doesn't explain how it will fall but rather that is is historically high.

I can see a scenarios how it might happen but it is probably out of the control of the gov or any Australian politician.
 
RBA's Stevens talks down 'overvalued' dollar
Reserve Bank of Australia governor Glenn Stevens declared the dollar overvalued by more than “just a few cents”, which hoses down expectations that the next interest rate move could be up according to Perpetual's Matt Sherwood.

Low interest rates fuel market bull run

Investors are heading into 2014-15 with Wall Street at a record high and volatility almost at a record low. The buzzword for conditions is “benign” and the Reserve Bank of Australia hasn’t flinched from its on-hold mantra.


Sent from my iPhone using AustFreqFly
 
whatmeworry said:
Surprising the governor keeps talking the dollar down and the property market down, yet doesn't explain how it will fall but rather that is is historically high.

I can see a scenarios how it might happen but it is probably out of the control of the gov or any Australian politician.
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Everyone at the RBA recognises how bad the property bubble is for Australia, but doesn't want to be the guy responsible for the chaos that will ensue when it pops.

Plus they all have investment properties as well, so have a vested interest in keeping it inflated as long as possible.
 
Hypothetically though, a plunge in the AUD would make it more desirable for not only Australian exporters but cause a significant impact on housing demand by foreign investors. I mean, if foreign buyers aren't afraid to buy now, if and when the AUD drops, it will only make it even more 'affordable' for those buyers. Scary thought.
 
drsmithy said:
Everyone at the RBA recognises how bad the property bubble is for Australia, but doesn't want to be the guy responsible for the chaos that will ensue when it pops.

Plus they all have investment properties as well, so have a vested interest in keeping it inflated as long as possible.
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I guess we have to keep watching the pollies declared interests and if they start selling off their investment properties then we know things are about to happen.

For property prices to fall, they would need to make it tougher for oversea buyers to buy properties and/or get rid off negative gearing. Potentially they could lift interest rates, but Tony Abbott and friends have already depressed the economy so much, I can't rates going up for a while.

I can only see new restrictions on foreign investments on housing to be implemented.

Alanslegal said:
Hypothetically though, a plunge in the AUD would make it more desirable for not only Australian exporters but cause a significant impact on housing demand by foreign investors. I mean, if foreign buyers aren't afraid to buy now, if and when the AUD drops, it will only make it even more 'affordable' for those buyers. Scary thought.
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If the world economy stays strong and Aussie interest rates stay relatively the Aussie should stay high unless foreign investment is heavily curtailed.
 
whatmeworry said:
Surprising the governor keeps talking the dollar down and the property market down, yet doesn't explain how it will fall but rather that is is historically high.

I can see a scenarios how it might happen but it is probably out of the control of the gov or any Australian politician.
Click to expand...

It hardly as if this would happen in a predictable manner, the whole point of talking these down is to stop a bubble burst. Success will be measured by you not noticing anything and then you'll probably think the governors actions have had no affect.
 
Alanslegal said:
Hypothetically though, a plunge in the AUD would make it more desirable for not only Australian exporters but cause a significant impact on housing demand by foreign investors. I mean, if foreign buyers aren't afraid to buy now, if and when the AUD drops, it will only make it even more 'affordable' for those buyers. Scary thought.
Click to expand...


very scary thought indeed
 
Because we live in a top Government high school zone our area has been swamped with Indian,Sri Lankan and Chinese buyers who are currently keeping the prices at about $200,000 higher than normal values applicable to one suburb out of the area.
These overseas buyers are not stopped by a high or low Australian dollar but it would all go pear shaped if that school closed.
I understand the same thing has occurred on the other side of our city of Perth.
Meanwhile our currency is being held up by the interest rate differences even though Captain Glenn would wish for it to fall sharply.
 

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