The Political World – Finance
The nation faces days of political paralysis after the weekend election failed to produce a clear winner.
How does this affect our finances – in a range of ways.
Uncertainty – A negative impact may already be in the making on the Australian property market before the country even knows the makeup of the next government.
One Nation are expected to secure more than one seat in the new Australian Senate and the hard-line stance taken by Hanson and the party towards immigration and multiculturalism could have a serious impact on foreign investment in Australian real estate according to a report in the Australian Financial Review.
Uncertainty – Research from Macquarie economic analyst James McIntyre argued the UK’s decision to leave the European Union could drive population growth in Australia by prompting more expatriates to return home and deterring locals from heading abroad. Consequently, a drive in population growth will boost demand for houses.
“A weaker growth outlook for the UK, and Europe, could see a return of Australian expats, and a decline in the number of Australians seeking better opportunities offshore,” the note said.
The weakening pound sterling, which is about 10% below its pre-Brexit exchange rate with the Australian dollar, makes working in the UK less attractive to expats who plan to bring the money home with them.
Uncertainty – The US election campaign continues with new reports each day on the Trump factor. Watch this space.
With three countries – major players in the Western World and hence the finance world with Uncertainty being the word of the hour. Is it any wonder that everyone is holding their breath, watching and waiting?
In the last couple of weeks – the world politically has seemed to have gone completely mad.
While it is always a gamble when you’re choosing between fixed and variable and there is such uncertainty. Including another rate cut on the cards – which banks have typically factored this into their fixed rate pricing so they are nearing the bottom of the market. Preparation is the key.
So for the moment – structure the finances as you would if you are considering a fixed rate but keep everything as flexible as you can with variable loans on offer. Still split the loans etc. so you can fix at any time in the future you feel you need to lock in or if you have a change in your circumstances.
Donna-Lee Parkes