Buying Overseas Property Case Studies

When purchasing a holiday home abroad, the foreign exchange rate can significantly alter the price of the property. World First can help in two ways:

We will provide a better foreign exchange rate than your bank.

We will offer you products to reduce the impact of adverse foreign exchange rate movements.

Immediate (Spot) Transaction

Mr. Johnstone bought a house in Spain that cost €240,000 on the 20th October 2008. He needed to make an immediate transaction (known as a "spot" transaction) to purchase the property. He initially sourced an exchange rate from his bank and then compared it to an exchange rate he obtained from World First:

	Retail Bank	World First
Exchange Rate	0.5050	0.5200
Transfer Fee	$30	$0
Total Cost	$475,278	$461,538
Total Saving		$13,740

Forward Contract Transaction

On 04^th June 2008, Mr. Jones agreed to buy $200,000 of Euros with payment due on the 15^th December 2008. Between the 04^th June and the 15^th December 2008, the Australian dollar to Euro exchange rate moved from 0.6200 down to 0.4800.

The amount of Euros Mr. Jones would have received on 15^th December by booking a forward contract on 04^th June 2008 is €124,000. If he had not booked a forward contract and he took the prevailing rate on 15^th December 2008, he would only have received €96,000.

With the forward contracts we offer, you can have peace of mind knowing that irrespective of exchange rate movements, you will always have a fixed Australian Dollar cost.

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