using visual Route and getting 500ms...ping

I'm trying to find a free or cheap web host and was trying to use visualroute to ping the site to determine if it is quick or not.
I am in australia and most of the free hosters are in the US. what I am noticing is that the ping is crossing the Pacific and I'm encountering a 400ms ping just for that leg.

I guess that is unavoidable, is the 400ms ping going to slow down delivery of my packets..??
Since many of my customers will be in Australia, would I be best in trying to find a host in Australia?
I am trying to offer my clients a free/cheap hosting service similar to what my site is based and hence be more competitive with the large $$$ hosts/sites.

Cel