A near-25 per cent fall in the value of the Australian dollar in recent weeks has given a big boost to the buying power of offshore investors with an eye on Australian property - particularly at the luxury end of the market in Sydney.
But at home, demand from wealthy domestic buyers is likely to fall in line with declining company earnings and shrinking bonuses next year - and that will see deal volumes in the luxury market tumble further and put downward pressure on prices.
Timing an entry point into the market would therefore require careful consideration, said property analysts.
'We agree that in the short term there could be a bumpy road ahead,' said Sandie Dunne, sales director of W Estate Agents based in the upmarket Sydney suburb of Mosman. 'But in the meantime the question is where do you keep your money?'
Within 18 months to two years underlying factors of demand would return to drive demand and prices higher for Sydney waterfront properties, added Ms Dunne.
'So whilst everyone is scared around the world about the financial outlook, if you are looking for a safe haven for your money there's no place like Sydney.'
