Aussie dollar falling

catbear · 19-11-2015 9:38pm

Aus$ hovering around €.67, looking good.

around €.678, looking very good for buying euro.

res ipsa · 21-11-2015 8:11am

catbear wrote: »

Aus$ hovering around €.67, looking good.

around €.678, looking very good for buying euro.

But you would be crazy to buy euro at the moment with the prospect of more QE. Best buy sterling & convert to euro at a later date.

cmac2009 · 03-12-2015 4:18pm

Some collapse today!

massdebater · 03-12-2015 11:47pm

cmac2009 wrote: »

Some collapse today!

Currently 0.6681 on currencyfair. What did it fall from? I checked earlier in the week and it was 0.67something. Did it go much higher than this?

cnocbui · 04-12-2015 10:52am

massdebater wrote: »

Currently 0.6681 on currencyfair. What did it fall from? I checked earlier in the week and it was 0.67something. Did it go much higher than this?

I don't know about currencyfair's price but it got to 0.6948 yesterday before Draghi opened his trap.

massdebater · 04-12-2015 10:43pm

cnocbui wrote: »

I don't know about currencyfair's price but it got to 0.6948 yesterday before Draghi opened his trap.

Where did you see that price?

cnocbui · 05-12-2015 12:47pm

massdebater wrote: »

Where did you see that price?

http://www.x-rates.com/graph/?from=AUD&to=EUR&amount=1

Dats_rite · 06-12-2015 11:44pm

I got matched at 0.695 just before the mini collapse....didn't think much of it at the time but glad I got it now

markymark21 · 13-01-2016 2:44pm

Couple of armchair economists have advised me to dump savings into Irish bank account as the exchange rate is likely to fall further this year. Although this looks like it will probably happen, you can get better interest rates in an Aussie savings account then an Irish one (as far as I can see) and with the DIRT being 41% what ever interest you make takes a hit in Ireland

Not too sure what I'll do, I think I'll keep it in Aussie account and hope the exchange rate turns back around over the next few years

catbear · 13-01-2016 5:38pm

If you're happy with the savings rate in aus and you'll be there for a few years then no worries.
The worse can happy is an Aussie property crash and banking crisis that could repeat the A$ low of .50 euro cent. I do wonder how much lower it would gone if China hadn't gone on a massive structural spending spree.

catbear · 22-02-2016 6:27pm

Don't know what's driving it but Aus$ on a rip today. Hope it lasts.

catbear · 09-03-2016 7:54pm

Hopefully .68 soon, by recent standards a good rate for buying €.

cnocbui · 09-03-2016 10:10pm

catbear wrote: »

Hopefully .68 soon, by recent standards a good rate for buying €.

What do mean 'soon', kemo sabe?

catbear · 09-03-2016 11:45pm

cnocbui wrote: »

What do mean 'soon', kemo sabe?

You jinxed it, back down to .679!!!

cnocbui · 10-03-2016 12:34am

catbear wrote: »

You jinxed it, back down to .679!!!

I just took a look and it was slightly over again. You must be the jinx.

I wish it would behave itself and go down again before Stevens has to cut the interest rate to make it.

catbear · 10-03-2016 11:16am

I wonder what's driving it, iron ore prices have seen a good bump the last few weeks. It would be great to get it over .70!

cnocbui · 10-03-2016 2:57pm

I'd say it has more to do with negative interest rates making Oz government bonds look pretty good. I'd love to know how much Chinese capital is trying to get get in to purchase properties, businesses and the like before the wheels fall off.

catbear · 10-03-2016 6:05pm

WTF, it did a spike to .69 and then swooned to .66; I had had a nice lump of cash lined up for transfer.

cnocbui · 10-03-2016 7:41pm

The financial 'logic' seems a bit weird - look, they are going to devalue the Euro even more, let's all pile in so we can watch our capital lose value too.

Look on the bright side, the Revenue vultures won't be collecting much DIRT tax in the near future.

s20101938 · 15-01-2017 3:40am

With Trumps inauguration next weekend there could be some serious movement in Au$.

Read article a few weeks ago that reckons the Big 4 Aussie banks will need a Au$200Bn bailout when they collapse as the housing bubble bursts. If that happens expect all the big infrastructure projects coming up in VIC & NSW to be canned and expect capital controls to come in big time.

Is now the time to move? What to do

lg123 · 15-01-2017 7:38am

what a cheerey message to wrap up the weekend!!

where was the article?

Wanderer78 · 15-01-2017 8:52am

Steve keen reckons this is the year Australias economy tanks, it's gonna happen at some stage!

cnocbui · 15-01-2017 4:15pm

When was the last time the Australian economy tanked?

catbear · 15-01-2017 6:00pm

cnocbui wrote: »

When was the last time the Australian economy tanked?

1992. That's a couple of generations who've never known a recession.

There was a dip in 08 when the global markets tanked but then Australia took the ascendent chinese commodities escalator whilst everywhere else went down. Before that happened though the Australia government did up the deposit guarantee to a quarter of a million dollars so there were jitters already about their finance sector.

This reduced risk pushed money into bank deposits and then banks lent that back into the property market and with low interest rates property funds looked more attractive etc.....basically slapping a turbo on it and filling the car with airplane fuel.

Added to that this is the beginning of the babyboomer retirees who'll want to sell up their negatively geared investment properties once they can no longer avail of that income tax break.

lg123 · 15-01-2017 8:22pm

catbear wrote: »

cnocbui wrote: »

When was the last time the Australian economy tanked?

1992. That's a couple of generations who've never known a recession.

Added to that this is the beginning of the babyboomer retirees who'll want to sell up their negatively geared investment properties once they can no longer avail of that income tax break.

One is definitely due......!!
how many of those baby boomers are negatively geared? of that cohort, I wouldn't think it's many.

Wanderer78 · 15-01-2017 8:26pm

might interest some round here:

http://www.abc.net.au/news/2017-01-11/economist-steve-keen-says-australian-house-prices/8176628

catbear · 15-01-2017 9:57pm

lg123 wrote: »

One is definitely due......!!
how many of those baby boomers are negatively geared? of that cohort, I wouldn't think it's many.

According to this: http://www.abc.net.au/news/2016-03-03/fact-check-negative-gearing-scott-morrison/7180812

Australian Taxation Office (ATO) data shows that of the 12.78 million Australians who filed a tax return, 10 per cent (1.26 million) were negatively geared in terms of rental property, which meant they recorded net losses on rental properties.

Interesting stat showing 23% of police use negative gearing, reminds me gards owning all the bedsits in dublin in the past!

And of the age profiles I found this from 2015:

The common refrain I heard when I lived in Perth was that once China commodities rush cools off they'd have India to fill the gap. Well India seems in no rush to spend and Perth property has gone soft already.

For anyone seriously considering buying a home in Perth now this is a seriously good update on the current declining market: http://wolfstreet.com/2017/01/09/mining-bust-crushes-incomes-house-prices-rents-in-perth-western-australia/

Next up is the bigger markets of Sydney and Melbourne. I reckon at the first sign of a serious funk or potential price declines the Chinese investors will bolt for the exits and flood the markets with all the empty apartments they've bought to park their cash.

catbear · 15-01-2017 10:08pm

Wanderer78 wrote: »

might interest some round here:

http://www.abc.net.au/news/2017-01-11/economist-steve-keen-says-australian-house-prices/8176628

Always found Keen extremely dry to listen to but he's not wrong in what he's saying.

listermint · 15-01-2017 10:13pm

catbear wrote: »

Always found Keen extremely dry to listen to but he's not wrong in what he's saying.

Link doesn't work....

Wanderer78 · 15-01-2017 10:15pm

catbear wrote: »

Always found Keen extremely dry to listen to but he's not wrong in what he's saying.

ive only started looking into his work, comes across as being a little arrogant but certainly is no fool

listermint wrote: »

Link doesn't work....

working fine for me

listermint · 15-01-2017 10:17pm

Wanderer78 wrote: »

ive only started looking into his work, comes across as being a little arrogant but certainly is no fool

working fine for me

Ahh maybe doesn't on mobile had to Google the article which opens a mobile URL.

catbear · 15-01-2017 10:31pm

Wanderer78 wrote: »

ive only started looking into his work, comes across as being a little arrogant but certainly is no fool

His last summation is concise, any Trump stimulus will not be enough to counter Chinese falling demand.

Wanderer78 · 15-01-2017 10:32pm

catbear wrote: »

His last summation is concise, any Trump stimulus will not be enough to counter Chinese falling demand.

i would imagine that would have negative implications for us?

cnocbui · 15-01-2017 10:54pm

catbear wrote: »

1992. That's a couple of generations who've never known a recession.

There was a dip in 08 when the global markets tanked but then Australia took the ascendent chinese commodities escalator whilst everywhere else went down. Before that happened though the Australia government did up the deposit guarantee to a quarter of a million dollars so there were jitters already about their finance sector.

This reduced risk pushed money into bank deposits and then banks lent that back into the property market and with low interest rates property funds looked more attractive etc.....basically slapping a turbo on it and filling the car with airplane fuel.

Added to that this is the beginning of the babyboomer retirees who'll want to sell up their negatively geared investment properties once they can no longer avail of that income tax break.

The Australian economy has never 'tanked' since the '30s. It has had downturns but has never delivered social misery such as Ireland has recently experienced.

The 'worst' unemployment rate since the end of WW2 was 11% in around '93. Since WW2, unemplyment over 10% has only pertained for 4-5 years in total.

Ironically, it was in the mid '90s that I bought my first house in Perth with a roughly 60% deposit and paid off the mortgage within a year. Tough times.

I absolutely agree that Australian residential property seems completely bonkers and over-valued and due for a correction. It would rather suit me if that happened. Despite the predictions I see no signs of it. Perth is an exception. The East coast seems quite impervious to reason. Iron ore prices are booming. I can't see Australia's economy 'tanking' until China's does.

catbear · 15-01-2017 10:55pm

Wanderer78 wrote: »

i would imagine that would have negative implications for us?

We've got an actual decent mix compared to Australia. China went from being just 2% of the exports to over 40% during the commodities boom.

Ireland is a small economy in the largest trade bloc in the world into which we can venture easily to replace any Brexit losses and we can take advantage of our atlantic connections to get whatever we can from the Trump dump. CRH shares jumped on his election.

Our real concern is closer to home, what happens to NI after Brexit. NI elections probably in March so we'll see if disenchanted DUP voters will stay at home.

There are decades where nothing happens and then there's months when decades happen.

catbear · 16-01-2017 2:49pm

cnocbui wrote: »

Ironically, it was in the mid '90s that I bought my first house in Perth with a roughly 60% deposit and paid off the mortgage within a year. Tough times.

Weren't average house prices roughly only twice twice the average wage then?

A lot has happened since!

cnocbui · 16-01-2017 3:25pm

catbear wrote: »

Weren't average house prices roughly only twice twice the average wage then?

A lot has happened since!

I don't think so. I would say it was more like 4 times. Yeah, that looks about right: http://www.rba.gov.au/publications/bulletin/2012/dec/pdf/bu-1212-2.pdf

The real factor was it was a cheap dump in a not very popular suburb. However, it was on a 1/4 acre block which had it's attractions when it came to sell.

I sold up a short while into the boost phase on the way to the stupid prices of today. A lot has changed. I would love to see prices retreat as I am thinking of moving back in a couple of years.

Still, even with the insane overvaluation in Oz, the undervaluation in Ireland is probably more insane. I had my current house valued a few years ago and it was significantly less than just the replacement construction cost of the structure alone, which is insane.

catbear · 26-04-2017 1:37pm

An aussie friend in Perth sent this news story onto me this morning, this bit really stood out for me.

"The year to 2012, 56,000 people came to WA from other countries and 14,000 from the rest of Australia," he said.

The housing affordability debate is increasingly becoming the home of wacky ideas ranging from dangerous to disastrous, writes Michael Janda.
"But in 2015-16, only 14,000 people came to WA from other countries and we actually lost almost 10,000 people to other parts of Australia.

http://www.abc.net.au/news/2017-04-26/perth-housing-slump-a-lesson-for-sydney-and-melbourne/8473174

Anyone on this forum still on the ground there, what's the vibe like now?

Peregrinus · 26-04-2017 2:07pm

Glum. The mining/resource industry is still in massive contraction, and the state's public finances are in a fairly parlous condition. A newly-elected state government has an opportunity to engage in a bit of austerity, and blame the need for it (with some justification, as it happens) on their spendthrift predecessors. That might help to improve the public finances but in the short term it means more economic pain.

catbear · 26-04-2017 2:50pm

I looked up the block I used to rent near the city centre and average rent appears to be 2/3 of what we were paying in 2014!

Can't say I didn't see it coming but its always a jolt when you see it.

catbear · 27-04-2017 11:47am

Lifeline financial counsellor Jenny Cecil said they were servicing a new group of clients - those struggling as a result of the economy collapsing. Many had been high income earners.

She said a lot of clients were now using credit cards to maintain mortgage payments, electricity bills and council rates, making their financial positions even harder.

During the product resources boom in WA incomes doubled, and Bankwest chief economist Alan Langford told 7.30 households were not getting the income growth today they were during the boom.

It's a very different story in Perth compared to Melbourne and Sydney.

"They say in the top end of Perth on a quiet day you can hear the property values falling," Mr Hegney said.

"And property values at the top end of the market have probably dropped 30 per cent from where they were at the peak of the market in 2009."

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11846339

Wow, things certainly have cooled off there.

ifeelill · 27-04-2017 11:48am

catbear wrote: »

I looked up the block I used to rent near the city centre and average rent appears to be 2/3 of what we were paying in 2014!

The apartment that i am currently renting when built was renting for $600 per week i am currently paying $360 per week.

lg123 · 28-04-2017 12:16pm

but property never goes down in australia?!?

catbear · 28-04-2017 12:55pm

Canada also rode the Chinese commodity bubble and are seeing cracks appearing in their property markets.

No one really should be surprised.

res ipsa · 30-04-2017 9:20pm

catbear wrote: »

Always found Keen extremely dry to listen to but he's not wrong in what he's saying.

Like David McWilliams, he will be right one day.

aido79 · 01-05-2017 1:47am

res ipsa wrote: »

Like David McWilliams, he will be right one day.

Economists have predicted 10 of the last 7 recessions:)

09-05-2017 10:20am

res ipsa wrote: »

Like David McWilliams, he will be right one day.

Neither of them were ever wrong in their predictions except timing.
Their analysis was 100% correct.

The real tragedy was that the bubbles kept getting inflated bigger and bigger. This made it appear that they were just cranks. The bubble got so big in Ireland it took down the entire banking system and was in danger of taking down banks in Europe and the US.

In Australia the bubble kept inflated by mining for years longer than the bubbles that popped circa GFC. The huge geographical isolation here means places like Melbourne and Sydney can continue to embrace the bubble psychosis while the Perth and outback Queensland bubbles deflate.

What really matters for Australia is what happens in Melbourne and Sydney. This is where half of Aussies live or thereabouts.

"For the first time Westpac [WBC] disclosed its exposure to interest-only (IO) lending, which contributes 50% of its mortgage book and 46% of 1H17 flows," Mott writes in a note to clients.

"This compares to ~40% for the system.

http://www.smh.com.au/business/markets-live/markets-live-eerie-calm-descends-20170508-gw0j5d.html

40% of the stock of banking loans among Australian banks are interest only loans. That is systemic annihilation levels of risk. This will be contagious to New Zealand and vice versa at the least.

res ipsa · 09-05-2017 2:50pm

We,ve just had the budget. No cut to negative gearing. Nothing to stem the price rise tide. The only thing that can turn the Oz house price cruiser round is a rapid rise in interest rates. There was an ozzie bank transaction tax but i think it will take us inflation rises & usa interest rate rises to force the reserve bank to raise rates in Oz.

Tigerandahalf · 09-05-2017 3:06pm

res ipsa wrote: »

We,ve just had the budget. No cut to negative gearing. Nothing to stem the price rise tide. The only thing that can turn the Oz house price cruiser round is a rapid rise in interest rates. There was an ozzie bank transaction tax but i think it will take us inflation rises & usa interest rate rises to force the reserve bank to raise rates in Oz.

If they do raise interest rates it will lead to a flood of defaults on mortgages. A lot of mortgages are on interest only.

The banks there seem to be in bad shape. I wonder what is their exposure to commercial property?

10-05-2017 9:30am

Exactly right and thats the reason why nobody wants to intervene to cool the market. Any move like that would be like pin pricking a balloon.
It is also why ARPA/the RBA/the Government/banks have been kicking the can to each other lately blaming the other for not controlling the market.

The RBA actually claimed that interest rates are not to blame. They put the blame with lax lending policies and negative gearing.

http://www.afr.com/markets/equity-markets/the-rbas-philip-lowe-doesnt-want-to-be-blamed-for-the-property-crash-20170412-gvk438
http://www.afr.com/real-estate/low-interest-rates-not-to-blame-for-property-bubble-rba-says-20150917-gjp6nx
http://www.smh.com.au/business/the-economy/rba-governor-philip-lowe-blames-lax-lending-tax-concessions-for-house-prices-20170404-gvdmfb.html

Truth is they are all to blame

And here is a disturbing comment from an analyst from RBC Capital:

The weakness in spending over Q1 is somewhat surprising given that household wealth grew further over H2'16 given the rise in residential property prices

http://www.smh.com.au/business/markets-live/markets-live-eerie-calm-descends-20170508-gw0j5d.html

Even without any rate rise and intervention there is only so much you can borrow before the house of cards comes down. I think we are at the point of no return. Give it a few months of stalled selling then the defaults will mount and suddenly some banks will find they have no money. How long did it take in Ireland? 12-18 months? Things kinda slowed mid 2007 and by September 2008 we were guaranteeing the banks.

Aussie dollar falling

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