Rising Australian dollar and housing prices... how do they correlate?

[SilverSanchez]

In an environment where the Australian dollar is rising. Lets assume a 10% rise over the next 2-5 years

Already read through this essay
http://www.rba.gov.au/econ-compet/2010/pdf/first-year.pdf

But...
What happens to housing prices (considering everyone is saying Aussie Property is in a Bubble)
What happens to stock market prices?
Is it good, neutral or not so good for prices?

I assume it will be too much for Government to handle and they will increase taxes and tarrifs to make sure they steal as much as they can.

 

[TheEnd]

I've been 'sitting on the fence' for 8 years..... All I can say is if the U.S goes down, WE GO DOWN. We are actully VERY lucky the U.S is about to raise their debt ceiling on March 25th... Or else ALL HELL WILL BREAK LOOSE... Think about it!!!

 

[Capitalist]

What happens to housing prices (considering everyone is saying Aussie Property is in a Bubble)
What happens to stock market prices?
Is it good, neutral or not so good for prices?

I assume it will be too much for Government to handle and they will increase taxes and tarrifs to make sure they steal as much as they can.

A rising Australian dollar will indicate a strong economy and higher interest rates. It can therefore be assumed that property prices will also be rising or at the very least staying flat.

Stock market prices should rise since the economy is strong. Obviously companies with overseas sales will be negative affected.

It's good for prices since we import most of the consumer goods in this country, a rising dollar will lower consumer prices.

 

[danman49]

What happens to housing prices (considering everyone is saying Aussie Property is in a Bubble)
What happens to stock market prices?
Is it good, neutral or not so good for prices?

I assume it will be too much for Government to handle and they will increase taxes and tarrifs to make sure they steal as much as they can.

A rising Australian dollar will indicate a strong economy and higher interest rates. It can therefore be assumed that property prices will also be rising or at the very least staying flat.

Stock market prices should rise since the economy is strong. Obviously companies with overseas sales will be negative affected.

It's good for prices since we import most of the consumer goods in this country, a rising dollar will lower consumer prices.

Hmm, not so sure about the rise in stock prices, money tends to move to bonds/banks and out of shares as interest rates go up.

 

[Lovey80]

A higher Aussie dollar for any extended period of time will kill the only thing that is keeping us afloat.... The mining sector.

 

[GBN]

Significantly higher dollar -> offshoring of jobs & closing of marginal mines -> under / un employment -> morgage stress -> more homes on the market -> home prices fall.
Stronger dollar -> perception of strong economy -> capital inflows -> strong stock market.

 

[errol43]

A higher Aussie dollar for any extended period of time will kill the only thing that is keeping us afloat.... The mining sector.

Doesn't the mining industry do business in US $. Maybe it won't matter ?

Regards Errol 43

 

[mmm....shiney!]

A higher Aussie dollar for any extended period of time will kill the only thing that is keeping us afloat.... The mining sector.

Doesn't the mining industry do business in US $. Maybe it won't matter ?

Regards Errol 43

Expenses are in AUD, whereas sales are in USD which means when converted back to AUD to pay for expenses and profit sharing there is less moola to go around.

The expenses that do hit the miners hard are wages, transport costs and compliance costs which are not sourced from overseas but are charged internally. Equipment sourced from overseas is cheaper sure, but it would depend on when the contract for supply was signed. Or so I think. And of course profit sharing has to be paid out in AUD to Australian shareholders.

Can we get a "talking out of my bum" smiley? Something like this? 3<

 

[Dogmatix]

^ "457" amens to that

 

[Guest]

I've been 'sitting on the fence' for 8 years..... All I can say is if the U.S goes down, WE GO DOWN. We are actully VERY lucky the U.S is about to raise their debt ceiling on March 25th... Or else ALL HELL WILL BREAK LOOSE... Think about it!!!

By raising it, they are making the inevitable worse. How is this lucky?