Australian dollar's slide cheers travellers, students

Singaporeans vacationing in Australia find they have more to spend

The traditionally strong Australian dollar has finally gone down under, with travellers, students and property buyers among those who immediately stand to benefit.

At the start of last month, A$1 cost as much as S$1.27. Last Friday, it was about S$1.18, its lowest level since July 2010.

Ms Jennifer Tham, whose son Leroy Wan, 23, is a diploma-year student at Curtin College in Perth, said his school fees are now cheaper in Singdollar terms.

Ms Tham, 49, who sends her son about A$12,000 every six months for school fees, said the most recent payment cost her S$1,400 less than usual, as a result of the weaker Australian dollar.

"I will observe whether the Australian dollar continues to go down - if it does, I will take the opportunity to change more cash for him," said Ms Tham, who works at a local bank.

Earlier this year, the cost of a non-medical, four-year degree in Australia added up to S$272,338, based on an exchange rate of A$1 to S$1.27. Based on last Friday's exchange rate, the same degree will now cost about S$20,000 less.

If the Australian dollar falls to as low as A$1 to S$1.15 over the next few months as predicted by OCBC forex strategist Emmanuel Ng, the savings will rise to S$25,000.

Singaporeans vacationing in Australia during the June holidays are finding they have more to spend. At the start of May, a vacationer could get A$787 for every S$1,000. At last Friday's exchange rate, he would have got A$847.

For now, Australian tour prices - which can range from about S$1,800 for a five-day trip to Cairns to S$3,300 for an eight-day trip to Tasmania - have not come down.

Mr Sam How, general manager of Asia-Euro Holidays, said travel package prices have not fallen as agencies are waiting to see if the Australian dollar remains weak.

"We may eventually cut travel package costs if the trend of the lower Aussie dollar is sustained. But one major obstacle is that Australian airport tax and baggage tax are high... so these automatically inflate costs," he said.

Mr Julian Sedgwick, head of international residential sales at Savills Singapore who markets properties in Australia, said the number of inquires about Australian properties has risen since the currency's slide began last month.

Australian properties being marketed here include the Southbank Grand in Melbourne, where the lowest price for apartments there was advertised at A$359,000 in May.

That would have been S$455,930 at last month's exchange rate, and S$423,620 at last Friday's rate - saving more than S$32,000.

However, changes in demand for Australian property loans are not always a result of changes in currency strength, said Mr Philip Lim, ANZ Singapore's head of retail banking.

"We don't see any direct or immediate 'cause and effect' at play here, because the decision to buy an Australian property is usually motivated by a genuine investment or self-use need for the property, rather than an opportunity for a pure foreign exchange gain," he said.

Retailers and importers here said the exchange rate has benefited them but it has yet to translate to lower prices to consumers yet.

Ms Leelyne Yeo, general manager of fine food supplier and retailer Culina, said the weaker Australian dollar has helped to cushion the impact of rising costs elsewhere, such as labour and rental costs.

The company imports beef, fresh produce, grocery items and wines from Australia.

When asked if its prices are likely to be lowered, Ms Yeo said: "It really depends on how much the currency weakens and how permanent that will be."

chiaym@sph.com.sg