01 July 2008
Aussie dollar strong, house prices down, Australian immigration looking more attractive
The Australian dollar, or the "Aussie", is controllably soaring at the moment, reaching a 25 year high against the US dollar. With property prices looking to take a turn, and the national immigration policy opening Australia to the world, the country is set to attract more migrants than ever.
China is somewhat responsible for the rise in the Aussie, as importers agreed to pay record prices for Australia’s biggest export, iron ore. Iron ore and coal exports account for 17 per cent of Australia’s economy, and as a result of this deal the Aussie was trading at 96.21 US cents on June 27. That is a 5.4 percent rise this quarter in the Aussie, or 9.9 per cent this year, claims Bloomberg.
Sean Callow from the Westpac Banking Corporation says the Australian economy has a secure future and people need not to worry about a downturn or crash. "The optimism that the commodity boom will be long-lasting manifests itself in the mergers and acquisitions deal flow. It’s a positive for the Aussie," he said.
In certain areas of Australia it seems house prices are taking a downturn, making it easier for first-time buyers in Australia to take the plunge into owning property. For example, in Sydney’s lower north shore at the high-end of the property market, house prices have seen a 7-10 percent drop this year after a four year climb of around 8-10 percent, reports the Sydney Morning Herald. "If you bought a house in Bondi a few years ago, you could sell it a year later and have some capital gain," said Kim Quick, residential valuer with Herron Todd White. "But if you paid $2.5 million for it last year, you might get $2.2 million to $2.3 million now."
The strong Aussie dollar and cheaper lifestyle in Australia is grabbing international attention. Government statistics showed recently Australia’s population has risen at its fastest rate since 1988, and migrants on Australian visas and Australian ex-pats returning home are currently contributing to 60 per cent of this increase.
"Boomerang migrants" (Australian ex-pats returning home permanently) and UK citizens have caught on to the trend to migrate to Australia for lifestyle choices. In comparison with the UK, Australia’s cost of living, climate, and economy are proving more enticing for young families and young professionals alike. The British Pound, which has for the last 11 years held strong against the Aussie dollar, is no longer a draw-card for Australians and UK citizens.
The Australian Government is welcoming the exodus of migrants from the UK, as the demand for skilled and unskilled labour is affecting progress in certain industries. The Government has recently increased the annual quota for Australian immigrants, and are reviewing proposals to introduce a guest-worker scheme that would allow 5,000 Pacific Islanders to temporarily work in rural areas of Australia.