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Staff Reporter
The falling Australian dollar signals a boom for the property market, as research points towards more affordable new home construction.
Over the past few months, the Australian dollar has fallen significantly from its historic highs as a result of a combination of internal and external factors.
According to research conducted by the Housing Industry Association (HIA), the Reserve Bank's decision to cut the official cash rate combined with sharp reductions in the price of Australian-produced commodities like iron ore and gold has dented demand for the currency.
As such, economic forecasters expect the Australian dollar to fall somewhere between 70 and 80 US cents by the end of the year, which the HIA believes will represent a boon for the Australian economy and spur on new home construction.
"Exports will generally increase due to the fact that Australian products are cheaper for overseas buyers. Similarly, imports will tend to fall because they become relatively expensive compared with domestically produced products," a statement from the HIA read.
"The balance of domestic demand will also tend to swing away from imports and will benefit local manufacturers, including those supplying materials to the building industry. The wider recovery in demand across the economy is also likely to benefit sectors like new home construction and renovations activity."
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