A fall­ing dol­lar is not all bad

Townsville Bulletin - - NEWS -

Aus­tralian com­pa­nies with in­ter­na­tional earn­ings will also ben­e­fit, as the prof­its they make in other parts of the world will be worth more back home. On the other hand, im­porters will suf­fer, as will com­pa­nies that make sig­nif­i­cant pur­chases in for­eign cur­rency.

In­ter­na­tional in­vest­ments will be­come more ex­pen­sive, how­ever, if the in­vest­ment is un­hedged ( not pro­tected against cur­rency move­ments), then any fu­ture in­come re­turns or cap­i­tal gains will be worth more if the dol­lar keeps fall­ing. RE­VIEW PROP­ERTY IN­VEST­MENTS Aus­tralian prop­erty will be­come more at­trac­tive to for­eign in­vestors as the dol­lar falls, which could push prop­erty prices up fur­ther.

Many peo­ple blame for­eign de­mand for me­te­oric price rises in Syd­ney and Mel­bourne in the past 12 months . . . although we don’t be­lieve that’s the whole story.

Still, the gov­ern­ment has taken steps to crack down on for­eign in­vestors that breach our strict laws, and of course all ap­pli­ca­tions by for­eign cit­i­zens must be put to the For­eign In­vest­ment Re­view Board.

This should keep un­due in­flu­ences un­der con­trol, but for­eign de­mand could still serve as a floor un­der prop­erty prices as the dol­lar falls.

Fi­nally, while the Aussie dol­lar has hit the skids against the green­back, it is still hold­ing up against the euro. So while a trip to Amer­ica is more ex­pen­sive, it’s still cheap by com­par­i­son to go to Europe.


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