The Urban Developer
AdvertiseEventsWebinarsUrbanity
Industry Excellence
Urban Leader
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
UPCOMING EVENT - INDUSTRIAL AND LOGISTICS SUMMIT 16 OCTOBER, SYDNEY
INDUSTRIAL AND LOGISTICS SUMMIT - TICKETS NOW ON SALE
LEARN MOREDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
OtherStaff WriterWed 25 Mar 15

How Will The Lower Dollar Impact Our Property Market?

TUD+ MEMBER CONTENT
A
SHARE
print
Print

According to a new report from CBRE, the lower Australian dollar, combined with cheaper oil prices and continuing low interest rates will provide a positive boost to commercial property returns over the year ahead.

The Australian dollar is now 25-30% below its peak levels of early 2013 in a reflection of both lower commodity prices and expectations of narrowing interest rate and yield differentials between Australia and the rest of the world (particularly the US).

CBRE Head of Research, Australia, Stephen McNabb said this would be supportive of many property occupier segments in Australia – the extent being dependent upon the segment’s orientation to exports, import competition or import reliance.

“A lower AUD is generally beneficial to larger exporters and sellers of domestically produced products, but raises input costs and squeezes margins for importers,” Mr McNabb said.

“Incomes from many commodities, such as mining and agriculture, will increase as long as they aren’t offset by lower USD prices. Exporters of services are also set to benefit, especially accommodation and tourism, with around 20% of their demand coming from offshore. Education will also benefit but to a lesser extent.”

Other winners include “import competing” businesses in which Australia has scale or a specialisation, for instance as food and beverage, as well as domestic tourism, as fewer Australians travel overseas.

Mr McNabb said a sustained lower AUD would also reduce the profitability of moving jobs offshore to cheaper labour sources, including customer service and back office roles such as IT – weakening the case for offshoring job.

The losers will include manufacturers and retailers that utilise imported inputs.

“Around 40% of retail goods are imported, a large part of which are discretionary items such as household goods and clothing,” Mr McNabb said.

“This probably places international retailers in a better position due to their global sourcing scale, despite AUD income streams translating into a reduction in foreign currency income.”

The lower AUD was also a positive for property owners, Mr McNabb said, with commercial property tending to perform well after periods of currency decline.

“We expect this to be the case through 2015, with a lower dollar offering stimulus to the economy, in the same fashion as lower interest rates,” Mr McNabb said.

CBRE’s Viewpoint highlights that the office sector has the weakest correlation with the AUD, and that the retail sector has the strongest correlation, particularly for sectors that aligned to discretionary spending.

The industrial sector benefits through more traditional channels, particularly logistics, with a rise in export volumes and domestic demand supporting logistics volumes.

 

IndustrialAustraliaSector
AUTHOR
Staff Writer
"TheUrbanDeveloper.com is committed to delivering the latest news, reviews, opinions and insights into the best of urban development from Australia and around the world. "
More articles by this author
ADVERTISEMENT
TOP STORIES
Global Shifts Redraw the Map for Australia’s Office Market
Exclusive

Office Eyes Slowdown as New Stock Supply Becomes a Trickle

Vanessa Croll
7 Min
Salta MD Sam Tarascio
Exclusive

Why Salta Won’t Break Ground on $400m Pipeline

Leon Della Bosca
7 Min
Exclusive

Precinct Proposals Bloom as Brisbane Middle-Ring Sheds its Past

Phil Bartsch
8 Min
Exclusive

Newest Land Lease Player Plots Sector Shake-Up

Taryn Paris
5 Min
Waterloo Affordable Mirvac hero
Exclusive

Affordable Housing Rules Tighten as Proposal Deluge Continues

Clare Burnett
5 Min
View All >
Goldfields Elimbah Sell-Off hero
Residential

Moreton Bay Superlot Expected to Top $300m

Phil Bartsch
Global Shifts Redraw the Map for Australia’s Office Market
Exclusive

Office Eyes Slowdown as New Stock Supply Becomes a Trickle

Vanessa Croll
Parramatta Road Rezoning HERO
Policy

Parramatta Road Rezoning Opens Way for 8000 Homes

Vanessa Croll
Sydney’s "ugliest road", long dogged by failed plans, could be revived under a rezoning deal but doubts remain over deli…
LATEST
Goldfields Elimbah Sell-Off hero
Residential

Moreton Bay Superlot Expected to Top $300m

Phil Bartsch
2 Min
Global Shifts Redraw the Map for Australia’s Office Market
Exclusive

Office Eyes Slowdown as New Stock Supply Becomes a Trickle

Vanessa Croll
7 Min
Parramatta Road Rezoning HERO
Policy

Parramatta Road Rezoning Opens Way for 8000 Homes

Vanessa Croll
4 Min
Development

Mirvac and DisplaySweet: Decade of Innovation in Property Sales Tech

Partner Content
3 Min
View All >
ADVERTISEMENT
Article originally posted at: https://www.theurbandeveloper.com/articles/will-lower-dollar-impact-property-market