Melbourne Buyers Battling To Break Into Property Market As Australian Dollar Falls

Foreign buyers are taking advantage of the plummeting Aussie dollar and Melburnians are finding it harder to break into the property market, Herald Sun reports.

This would be the lowest level for Australian dollars in almost seven years after tumbling through US70c to US69.3c, and banking powerhouse Barclay's is forecasting it to drop even further hitting US63c by year end.

With that, Aussies are encouraged to make big ticket purchases now before the dollar declines further according to Russell Zimmerman of Australian Retail Traders' Association.

"I'd say to customers right now is the time to buy, the dollar has already fallen so retailers paid a better price than the dollar is now," Mr Zimmerman said.

Adding to the pressure is the looming threat coming from overseas property buyers, particularly from China, who are determined to enter the local property market now more than ever.

"It is a case of as the Chinese investors continue to get richer they are looking for places to put their wealth," Commsec chief economist Craig James said.

"The Aussie has weakened against the Yuan if anything that maintains the purchasing power of the Chinese buyer in the Australian market," he said.

The unstable Chinese market "may lead even more Chinese to be looking at overseas markets," he adds.

NAB stats also reveal that 28.5 percent of new apartment purchases and 26 per cent of new home purchases come from overseas buyers, surpassing that of other states and the national average.

But billionaire retailer Gerry Harvey is looking at the other side of the coin; pointing out how the falling dollar urges Aussies to do domestic travels instead overseas. The plunge also leaves electrical good prices unaffected, he adds.

"A lot of electrical goods haven't gone up in price and they probably should have," he said.

Meanwhile, foreign investment had helped bring Magic Million sales higher from $102 million to $128 million, comprising 35 per cent of the sales.

"They do take into account the 70 cent dollar," he said.

"When you put it all together, it's all pretty advantageous."

The lower dollar is also seen to improve export and earnings, with the big end of town rooting for the trend.