A falling $AUD would be beneficial to exporters, and thus overall good for the economy. If the economy improves and exporters start growing profits, that means they will start to employ more people and employment will increase - and with higher employment, employees will become more confident to make purchases, including purchasing property. I feel the falling $AUD will be beneficial for the economy and the housing market.
However, what you should consider is that with an improving economy and a rising property market, it will only be a matter of time before interest rates start rising. With a lower $AUD the RBA will be more confident in starting to increase interest rates. And increasing interest rates will have a dampening effect on the housing market.
You are looking to buy a property to live in - so how long do you intend to live in and hold the property? I would assume at least for the medium to long term. If this is your intention then why are you getting cold feet? What you should be concerned about is that you do not overstretch on your borrowings! Make sure you allow a buffer of 2% to 3% above current interest rates so that if rates do go up you can still afford the repayments. And if you get a fixed rate - then you should allow the buffer in case variable rates are higher when your fixed period is over.
Regarding the doomsayers telling you that property prices are going to crash - well they were saying that in 2008, then again in 2010, then again in 2012. I don't know about you but I have seen no crash. Sure when interest rates have gone up property prices have levelled off and maybe gone down by 10% to 15% in some areas, but as soon as interest rates start falling again property prices start increasing again. It's all part of the property cycle.
I actually find it is a better time to buy when interest rates are higher and you can negotiate a better bargain and lower price. Then when interest rates start falling you benefit from lower repayments and increasing property prices.
The only way there will be a property crash in Australia is if there was a dramatic economic downturn and unemployment rates rose to 10% or higher. But with good economic conditions, an increasing population and low supplies of newly build housing in Australia, I see no dramatic crashes in the foreseeable future. Yes we may get periods of weakness when interest rates increase, with falls up to 15% in some areas, but no crash of 40% plus. As I said above, these periods of weakness actually provide opportunities to buy properties at a bit of a discount.
In your comments you say you intend to buy with a monthly mortgage repayment of $2500 in place of your current monthly rent of $1800. That means your loan amount would be somewhere around $550k to $600K. You also mention you would be taking on a 5 year fixed rate, and look to sell in about 2 years time if you can break even (I assume that is break even on the price you bought at). In 2 years you would have paid $16,800 more on your mortgage than you would have in rent.
So here are the facts:
- if you are looking to buy now you would be buying when properties are at their highs,
- if you plan to sell in 2 years time you will be selling possibly when prices have dropped,
- if you take on a 5 year fixed rate and plan to sell in 2 years time you may be hit with extra fees from your lender for getting out of the mortgage before the fixed period is over,
- you will be paying $700 more in mortgage repayments than rent - costing you $16,800 over 2 years,
- you will lose money on the extra required to pay the mortgage, you will lose money in buying high and selling low, and you will lose money in fees for breaking your fixed rate period early.
A better strategy:
- don't buy now, keep renting and save up extra money,
- wait for interest rates to go up and property prices to drop a bit - 5% to 10% - this will enable you to negotiate a better price when the market is week and vendors are desperate to sell,
- if you buy when interest rates are higher and you can afford the property and the repayments, then you will certainly be able to afford it when interest rates come down again,
- you will buy at a discount so there is more room for the price to move up when rates go down again and the market starts booming again,
- if you chose to live there for 2 years and then rent it out you will be able to ask for a higher rent (when interest rates are higher there is less demand for buying property so you can usually buy cheaper, but there is more demand in renting - meaning rents will go up quicker),
- if you hold the property long term - 10 years, 15 years or more, you will build yourself an asset that has increased in price but also provides you with a net positive income each week. It will turn into an asset that you will never want to sell.