Google local server location a factor?

[lolwut]

:hi:

I've started a website and I plan to target the local market (Australia) my web server is located in America the domain I have is a .com.au.

Will having the server overseas impair my ability to rank good for my chosen keyword?

In other words would I be able to rank higher if my server was in Australia?

 

[lzy]

From my experience, yes. Your website will definitely rank better in Google.com.au if hosted in Australia.

 

[sji2671]

You can actually stipulate the country location your targetting using Webmaster central now.

 

[lolwut]

You can actually stipulate the country location your targetting using Webmaster central now.

Please explain?

Are you saying I dont need Oz hosting?

edit

I found what you are talking about but it only allows me to set a streets address, zip code, state and province but not the country. the country is grayed out! :td: