A senior economist has warned that the falling Australian dollar will hurt local businesses, but may entice foreign property investors to our shores.
According to Dr Andrew Wilson, senior economist at Australian Property Monitors (APM), the Australian dollar is on track to drop to between 70 and 80 US cents by the end of the year.
“I would be concerned with a 70 to 80 US cent Australian dollar,” he said. “A lower dollar is good for our exporting industries, but it also has a downside in terms of the cost of imports.
“The low dollar also means Australian property becomes cheaper to overseas buyers, and therefore more attractive for investors.”
However, Dr Wilson suggests that overseas investors may be on the lookout for ‘strong’ economies for safe investments, and a falling dollar may deter some.
“We’ve seen the phenomena of increased activity by overseas buyers with the increase of the Australian dollar, which has signalled to a lot of buyers - especially Chinese buyers - that the Australian economy is strong. So perhaps a lower dollar may show the opposite?” he said.
Andrew Taylor, founder of Chinese listing portal Juwai.com, reports that there has been an increase in searches for Australian property.
“We have noticed continued growth in searches for Australian property on Juwai over the past few months, coupled with increased leads and consumers planning to visit Australia,” Mr Taylor said.
“Property in Australia, including purchase price plus transactional costs, is essentially 13 per cent cheaper,” he explained.
“We anticipate that as south east Asian markets continue to cool, and as favourable currency exchange rates maintain their current levels, there will be continued greater interest in Australian and New Zealand property by Chinese investors,” Mr Taylor said.