Weakening Australian dollar set to see expats return to Australian property purchasing
The Australian dollar's fall below parity against the US currency will be welcome relief for expatriates thinking of buying back home.
It's still a bit soon, but they will certainly be taking a closer look at residential property following the recent decline in the dollar.
Even with access to very cheap interest rate opportunities overseas, the high dollar stopped many executives and white-collar professionals taking the time to search out for their likely new home during the summer of 2012/2013.
When the dollar was high, Rismark joint managing director Ben Skilbeck noted the high Australian dollar had also made local housing more expensive for expatriates, particularly at the luxury home end of the market.
An anticipated rush home by expatriates after job losses in Europe, Asia and the Middle East, didn't eventuate into an acquisitive trend after the global financial crisis.
MOSMAN agent Robert Simeon from Richardson & Wrench told Property Observer when compared to pre-global financial crisis Australian expats activity in property markets had been "few and far between."
"Obviously any value declines with the AUD$ would make Australian residences a lot more appealing although there is not enough anecdotal evidence that expats find our real estate as appealing as previous sales activity would indicate," Robert Simeon said.
He said the Chinese market was now the dominant players in his market demographic so a declining AUD$ will not be a market salvation for our expat markets more particularly at the top end.
"When Australia's commercial and investment banks are doing well our top - end property markets respond accordingly," he said.
Last May when the dollar briefly fell to 98 cents, it was noted the fall was possibly not enough to encourage expat Australians to invest back in the local residential property market, according to Greville Pabst, chief executive of property valuers and consultants WBP Property Group.
Pabst noted a falling Aussie dollar was positive news for expatriates, with the improved conversion rate giving them “greater buying power”.
However, he suggested the Australian dollar needed to "deteriorate to or below 90 cents against the US dollar before we expect to see an influx of expatriate buyers."
“A fall of 10¢ in the dollar (AUD) equates to a saving of $53,500 for expats based on the purchase of a property at Melbourne’s current median house price of $535,000.
"This is a great incentive in anyone’s eyes," he said in May 2012.
At noon today (Monday, May 20) the currency was trading at 97.66 US cents, having fallen more than five US cents between May 9 and May 17.
It reached parity with the US dollar in November 2010 and rose to a 29-year high of $1.108 on July 27 2011 before retreating.
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