How the falling Aussie dollar will affect property prices

At face value, a lower Australian dollar means Australian residential property becomes more affordable in an overseas currency - the purchaser has greater buying power for the same amount of money in their own currency.

However, this would not necessarily translate to stronger domestic property prices, as overseas buyers are now limited to the purchase of new dwellings in Australia.

While this might cause greater demand for new property (primarily off-the-plan apartments and units), without upward pressure on established dwellings (which are domestically led), off-the-plan prices are unlikely to be pushed up too far so as to become too expensive - and therefore uncompetitive - relative to established dwelling prices.

It should also be noted that, with the exception of China, the $A has fallen less against most other Asian currencies since the start of the year than against the US dollar (for which the Australian exchange rate is commonly quoted).

Moreover, if there is an expectation that the Australian dollar could fall further, then overseas buyers could delay a purchase rather than risk a currency loss on the property.

Consequently, we do not expect to see any major pressure placed on prices as a result of the depreciation of the Australian dollar.

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