British expats who have purchased property in the land down under will be pleased to see that property values are once again rising in Australia. Those who are considering buying will likely want to do so sooner rather than later as prices are expected to continue to rise both this year and again next. Investors, especially Chinese seeking to put their yuan into income earning properties have long favoured Australia and their continued investments help keep this pricey property market resilient. The Australian dollar is currently strong against the pound sterling, however, but interest rates remain low, making investors take notice of the Australian market. Analysts point to the Brexit fears as a temporary weakness that has plagued the pound, which will certainly strengthen against the Australian dollar,soon, or so hope those British expats who happen to be considering buying property in Australia.
1.3 million British expats live in Australia; many of them drawing pensions and other income from the UK to Australia will seek to avoid the impact of the current weak British pound pairing to the Australian dollar. Many know that currency specialists have a number of financial mechanisms-tools, geared just to fit today’s volatile currency marketplace, and they use them to save money when making transfers. Using a fixed forward when the Australian dollar was weak against the pound, just earlier this year will have saved these savvy expats a great deal of money.
Currency Exchange Tools to Use:
Those who are purchasing property in Australia will want to be certain to have signed up with an excellent currency company. Their dealer can watch the market and alert them when an more favorable rate occurs-which it might, since the Australian dollar has been rising and falling rather dramatically this year. At a point when the rates are better the purchaser who wants to save money would do well to set up a forward contract.
This requires only an initial deposit of 10 % in order to lock in today’s exchange rate for a year. For the expat entering the Australian housing market, this level of purchasing power and predictability will make a real difference going forward.
House Prices in Australia are actually quite high
Australian millennials are struggling to get on the property ladder in a housing market where more than half of home loans last year were taken out by speculative investors. Negative gearing was set in motion to keep rental property affordable, but has had a knock-on effect that’s kept many young working Australians-and expats, out of the property market.
Houses that once cost three or four times what average earnings were are now ten times earnings in Melbourne and 12 times that in Sydney. The current exchange rate is that extra edge those transferring currency can utilize to get on the Australian property ladder.
Australia Compared to UK pricewise:
Australia is more expensive than the UK in many ways, from the price of beer to bananas in the market. A bottle of domestic beer in the UK is about £1.30 and AU$ 2.48 down under, making it a tad over 104 % more expensive to quench your thirst in the enviably warmer climate. Bananas might be grown locally in Australia, but they cost more than those imported to the UK: £1.22 per kg vs AU$1.95. These little things will add up for pensioners, which make up over half of the British expats living in Australia. Those Brits working in Australia, according to figures just published by Numbeo, will be earning about a third more than contemporizes back in the UK. After tax the average monthly wage in the UK is £1,697, while an Australian salary, when exchanged to GBP works out to £2,269.
With rents averaging 29% higher in Australia, where a three-bedroom flat in the city centre is around £1,627 in GBPs, the same flat in the UK would be easier to afford at £1,260. Given the fact that purchasing property in Australia is slightly more expensive than in the UK, the recent weakness in the pound sterling rate. But those who register with a currency company and wait for the pound to rise when considering a super popular destination for retirement, like Australia. Those Brits already enjoying Christmas barbeques who locked in fixed forwards when the exchange rate was better won’t be troubled by the current exchange rate. Planning ahead and using the best foreign exchange tools is the best way to hop onto the Australian property market!