Expatriates to enjoy lower dollar house hunting over summer holidays

With the Australian currency at four-year lows of around US84.7c, there is little doubt that expatriates will be back holidaying here, with a keener eye for house purchasing.

A falling dollar makes local property less expensive for overseas buyers, especially opportune for expatriate Australians anticipating their return to Australia.

With the Australian dollar weaker, property is around 10% cheaper than the US94.9c it was just five months ago for those who are paid in foreign currencies.

The dollar is at the lowest levels since mid-2010. 

Purchasing has tended to peter out as the Aussie climbed higher and estate agents now expect overseas inquiries from expatriate Australians to increase.

But it doesn't necessarily mean higher prices.

In 2004 after plotting the correlation between house prices and US-Australian exchange rates since 1980, Rod Cornish from Macquarie Group concluded there was an interesting link between the rising dollar and house prices.

"Over the long term, house prices climb when the Australian dollar rises against the US dollar. The rate goes up when our economy is performing well, which means that inflation is held down so the Reserve Bank has less need to raise rates," Cornish said.

As a long-term trend, Cornish noted, a rising Australian dollar has almost the same effect on the economy as an interest rate rise.