SEO experts leave no stone unturned in the quest for higher search ranking, especially Google search ranking. One area of considerable debate is whether the location of your server impacts your search position. It is a difficult question to answer precisely, especially with the dominance of the cloud these days, but with more traditional server-based hosting, location might still have an impact.
A number of studies have looked at search results for websites that are known to be hosted on servers in the United Kingdom. The studies worked from the premise that searches that contained specific geographic references - i.e. electricians in Leeds - would give preference to websites that fit the search term AND were hosted in the United Kingdom (as opposed to fitting the search term but being hosted in the United States or elsewhere). The results of these surveys suggested only a nominal bias as far as search ranking is concerned.
That bias was there, but to the extent to which it is significant is debatable. Google has around 200 ranking factors, so believing that location is going to have a supreme impact on your situation is misguided. You have to have all your SEO ducks in a row before location has any real impact. Backlinks, quality of content, mobile friendliness, etc. - all the usual suspects have more impact on search than server location.
While search engines do try to detect if a website has relevance in a specific location, it is not simply a matter of checking IP addresses. Let's say for instance, you have a website about emigrating from the UK to the USA. Your website is obviously relevant to the UK, and your server is in the UK. But, for some reason, all of the links you receive are from sites in the USA. In addition, the traffic you receive is USA based, as is the social media discussion your website generates. With all of these factors, it is much more likely that your website would rank higher in Google.com that Google.co.uk.
In addition, if your target market is in China, you need to behind the "Great Firewall" or your site will definitely be slow. Speed is a now a key trigger with Google as far a ranking is concerned. The more "hops" data has to take en route, the slower the loading time. As a result, if your visitors are in the UK but your servers in Australia, it will take a website longer to load, and this will be reflected in Google ranking, however marginally.
Unfortunately, as far as this issue is concerned, the conclusion is not conclusive. It seems if your website is targeting a global market, it is of minor consequence where your server is. But if you are targeting a specific group in a specific country, hosting in that country has advantages, however nominal they may be.
Given the ease of access to web hosting providers wherever they are in the world, it makes sense to gain every advantage available in the SEO war. So our advice - host local to you market, just in case!