October 27, 2013

Forex Trading Sees Aussie Housing Spike

Forex Trading

The Reserve Bank of Australia made an announcement that home buyers need to remain realistic when buying a home despite the sudden real estate signs in Sydney and Melbourne. The bank further requests all Australian banks to remain within standard. It is an important concern considering the trouble the subprime mortgage market created in Western Europe and the USA. The housing data is very good for forex trading reports though. Anytime a housing report is out with positive news it is a good thing to the forex market. Housing is considered an economic indicator that stability is returning, there, or getting better.

Forex Trading Aussie Housing Report

Housing data shows Sydney prices are up 8.6 per cent for the year. Melbourne has increased 5.3 per cent in the same time frame. Much of the change in housing costs has been in the last three months with near 5 per cent increase in both markets. If the prices continue to increase, it will mean a double digit increase in prices for the coming year.

Auction houses are stating 90 per cent clearance rates for Sydney and 80 per cent in Melbourne. While it can be a good thing for forex trading in terms of better AUD value, there is significant worry from the RBA.

The RBA fears trouble is on the horizon since price guidance and valuations are not being properly adhered to. It is not all together unsurprising to see more market interest, especially because the RBA had to reduce interest rates to promote GDP growth for the year. The central bank just wants the banks to maintain some decorum of pricing and mortgages to ensure the economy is not actually hurt by the investments. One main concern is the super funds that are now up to 9 per cent for mortgages. The new source could create trouble in the housing market, which would turn bad for forex trading. The main worry is too much financial risk for those investing in the housing market. As any housing market around the world, Australia needs to keep a fine balance. Australia is beginning to see some of the alarming practises the USA and Western banks had before the boom went ka-boom.

Forex Trading Investors need to Watch Out

Anytime the housing report is good but it comes with a caveat like the RBA has given, there is a potential for trouble. Forex trading investors will want to make sure the banks heed the RBA and maintain proper balance or it could create a new reaction in the entire market.

For the AUD which could stand to lose a little for better economic recovery, it is still not a positive thing to have the housing market go towards implosion. For the moment the housing prices are looking good and have created a positive response in forex trading. The main concern is to make certain it maintains on this path rather than heading more towards disaster. As long as banks and lenders keep proper lending criteria in mind the housing market should be a supporter of a better economy for Aussies.




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