The Financial Industry’s Impact on Australian Migration

This is not a happy post.

  • Three years ago, one United States dollar would have bought you $1.38 AUD, today that stands at $1.11 AUD. That makes Australia 24% more expensive to Americans today.
  • Three years ago, one a European euro would have brought to $1.69 AUD, today it is still around the same. That makes Australia the same price now to Europeans as it was three years ago.
  • Three years ago one Great British Pound would have bought you $2.50 AUD, today that stands at a frighteningly low $1.77 AUD. That makes Australia 41% more expensive to Britain’s today.
Pound to Aussie Dollar

Pound to Aussie Dollar

As I write this, the exchange rate for GBP/AUD is just 1.7717. That means one Aussie dollar is now worth over 56 pence. The pound is in nose-dive. Does this represent an all-time low for the British pound against the Aussie dollar? No, far from it!

In 1976, one Australian dollar was worth 78 pence, or one pound bought just $1.28 AUD. You can see for yourself how the rates have moved since 1969 by clicking through to Ecomomatic.

Hoping to move to Australia soon?

The current exchange rate is bad news for anyone wishing to emigrate to Australia from the UK, but it gets worse when you consider the process involved in making the move. Anyone who has read my series on Moving to Australia will know how this can go. But depending on how you try to get here, it can be a lengthy process.

So by the time you get an answer from the Australian Government, the financial situation could be dramatically different to how it was when you first began the process. Even worse, you are expected to validate your visa by arriving in Australia and getting your passport stamped before a certain date.

I am not sure how they calculate that but for me, it was about eight months after the visa was issued. So I was granted the visa in July 07 and I had to arrive in Australia before February 08.

Anyone in the UK who has recently been granted their visa to come out to Australia may well now be looking at a disastrous exchange-rate and living in a house that has not only devalued in recent times, but is also very difficult to sell.

When we sold our house, we saw the pound fall from around $2.50 AUD to $2.25 AUD in just 3 weeks, all before we had even exchanged. That was largely thanks to Northern Rock Building Society who will probably be remembered for starting this whole financial crisis off. We thought we were unlucky, but looking back now, we were lucky to get out when we did.

So I really feel for anyone who is helplessly watching the pound tumble right now.

What are the choices?

Nobody can predict the future of currency exchange rates or the value of houses. So it is impossible to give any advice on that. But…

  • If you were thinking of putting in an application, but you are put off by the current situation, put in your application all the same.
  • If you are currently applying but feeling despondent about the process, continue with it anyway.
  • If your application has been accepted and you can’t sell your house and you can’t stand the exchange rate, treat yourself to an Australian holiday so that you validate your visa.

Because, once your visa is validated you are given five years (well, it was with mine, please verify the time period applicable to your visa) from the issue date in which to take up the option. So when I mentioned earlier that my visa was issued July 07, after validation I could have waited until July 2012 before turning up in Australia to actually live. Five years is a long time for economies to change. Look at all the fluctuations in the exchange rate since 1969.

With your visa secured and validated, you can sit, wait and watch. If, or when the situation improves, you will be ready to pounce. Well, you won’t even have to pounce, just telephone an airline company and book a one way ticket to Australia.

There are no guarantees that the situation will improve in five years, (although history suggests it will) but if moving right now is not an option, you have nothing to lose by waiting. On the other hand, if you do have a choice, then only you can make that choice. You may be better off financially if you wait or things could get worse. Who knows?

But if you do decide to bite the bullet and come now, at the least you’ll benefit from life in Australia immediately.

Still thinking about “the idea“?

I think the current financial situation will impact the number of people wanting to apply to move to Australia. If you’re thinking about moving to Australia, perhaps now is the time to make an application, so you’ll be ready to pounce when the situation gets better.

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Open a bank account in Australia
{ 4 comments… add one }
  • Valerie October 22, 2009, 5:11 am | Link

    Hey Bob,

    Sad post. Why must you write this?? But thank you. In YOUR opinion, do you think it’ll improve within the next 2-3 years? Our target is 2012-2013 to move. I am still in the process of getting my certification for nursing assistant and husband is in the finance industry. What do you think are the chances of us getting approved? I know you’re the the MARA, but just needed a 3rd party opinion.

    When do you think would be a good time to file for visa? After my schooling is done, as soon as possible, etc.

    Valerie

    • BobinOz October 22, 2009, 7:03 pm | Link

      Hi Valerie

      Who knows with the money markets. Anything can happen. But given your timeframe of two to three years, I would be very surprised if you didn’t see more favourable exchange rates at some point. Say two dollars to the pound or possibly even $2.20. But that would depend largely on there being a substantial economic recovery in England, I would think. You would also have to strike at the right time so I suggest you open your currency exchange trading account in preparation as these can take a few days to setup. I talked about that here.

      But I am no financial adviser, so here’s my disclaimer: please don’t listen to me, seek professional advice.

      If you were to send me your CVs and more details about your certification I could run them pass my friend who specialises in job placements for nurses. He would give me a better idea of your chances and when it would be best to apply.

      Cheers

      Bob

  • BobinOz October 19, 2009, 1:23 pm | Link

    I agree with you 100%. I wouldn’t let the current money market situation stop me from moving to Australia if I were trying to move now. But just like you, I don’t think I’d bring my money over at the current exchange rate either. I would wait for the exchange rate to improve, even though that could be risky.

    If we hadn’t have sold our house, I am pretty sure we would have rented it out and then rented when we got to Australia. Important thing is to just get here if you can.

    Hope things work out and you get your move to Oz soon.

    cheers

    Bob

  • Adam October 19, 2009, 12:03 am | Link

    It’s not a happy post, but weighting up living in the UK to living in Australia… I think I know which I would pick! Is there really ever a ‘good’ time to move though? Money is one thing, but as they always say… there’s more to life than money, although I know this view can change if you have a family. My money will be staying in the UK until things get a little better, albeit it may take a long time! I’m not giving up on my move to Oz yet! 🙂

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