Australian real estate market sees surge in US buyer interest amid falling currency

Home buyers with U.S. dollars have a favorable opportunity to purchase real estate in Australia due to the declining exchange rate of the Australian dollar. The currency has fallen below 65 U.S. cents following Donald Trump's election, who plans to impose tariffs on major trading partners during his second term. As of Thursday, it has dropped further to 62 U.S. cents.

Economists from institutions like Commonwealth Bank and National Australia Bank predict that the Australian dollar could fall below 60 U.S. cents this year, a level not seen since 2003 outside of the pandemic period.

Michael Pallier from Sydney Sotheby’s International Realty noted that "it’s a good thing when the Australian dollar sits below 65 U.S. cents," as it attracts foreign buyers and expatriates back into the market.

The depreciating currency aligns with a PropTrack report indicating increased international interest in Australian real estate, particularly from searches on realestate.com.au compared to last year.

According to Michael Coombs of Atlas, expats now represent about 25% of his clientele, an increase from approximately 10% two years ago. Karen Dellow from PropTrack highlighted that searches from the U.S., especially California, New York, and New Jersey, spiked as Trump emerged as president-elect.

Dellow also pointed out that Auckland leads globally in searches for Australian properties despite its smaller population compared to cities like Tokyo and Hong Kong.

The report shows overseas buyers typically search for higher-priced properties than domestic buyers do, often setting an upper limit at A$1 million (US$398,000). Melbourne is currently the most sought-after destination among foreign house hunters.

Jamie Mi from Kay & Burton reported a surge in international buyers interested in Melbourne's prestigious areas due to educational opportunities and lower currency value boosting their purchasing power by up to 15%.

With domestic buyers waiting for potential interest rate cuts by the Reserve Bank of Australia, international investors have less competition locally. Mi remarked that many foreign buyers are cash-ready and unaffected by local interest rates.

Sydney-based agent Michael Coombs observed increased inquiries for luxury homes post-U.S. election and attributed much of this demand to expatriates returning home with substantial budgets ranging between A$20 million and $50 million.

Pallier remains optimistic about continued international interest given the low Australian dollar: "Quite a few buyers have already arrived... including England, Europe, Hong Kong and Singapore."