There is always speculation about whether fluctuations in the Australian Dollar are going to affect the property market. This is how many newspapers and forums get your attention. The headlines alone, whether the Aussie dollar is going up or down, are enough to create further speculation.
So what does it mean to the average home buyer looking to own property? The truth is, very little. There are always going to be surges and drops in the market and they are not all as a direct result or even have anything to do with the value of the dollar in ANY country.
There are so many variables that may affect the housing or industrial property markets that you cannot lay blame on what the currency value is alone.
So what other market variables should be considered?
High unemployment will definitely affect the market. This is due to an increase in foreclosures.
Oil and Commodities
An increase or decrease in the cost of these essential products can affect how much money people are spending at any one time and how much spare cash they have.
When the Australian dollar is low, coming to this great country is way more attractive and certainly more affordable. The influx of overseas tourists, yes due to the low dollar, can change and affect property values should these tourists also be interested in buying property.
The Reserve Bank
The Reserve Bank controls the cost of lending money. We all wait with baited breath every time the Reserve Bank is going to release its findings.
Lower interest costs mean that consumers spend more. Higher interest costs would seem to mean less spending but not in all sections of the market.
What Does it All Mean?
If you have all of these factors in alignment, the moon is full and your tongue is hanging the right way, you may be able to predict and pinpoint the exact time to get in and out of the property market.
Time and time again, the economists have had it wrong and we have all survived.
What we say at Fountain Property Group is – go back to basics.
Do a budget to ascertain if you can afford to enter the property market.
Ensure you have enough capital (deposit) to invest in the deal.
Do your due diligence! – Research, research, research
If you do these three things, it does not matter what state the dollar is in when you enter the property market, you will be on a winning course.