Following an announcement by the Overseas Study Service Center of the Ministry of Education of China on January 28 that it would no longer recognize degrees earned by students who studied remotely at foreign institutions, which means more than 50,000 Chinese students are anticipated to fly back to Australia for the start of the first semester. As a result, student accommodation markets will be stimulated, and the ripple effect will be felt in private rental markets as well.
The vacancy rate in Australia has dropped to an all-time low, and rentals have risen swiftly in some places. Inner Melbourne unit rents have increased 33.6% in the last year, while Sydney unit rents have increased 23%,
In addition, SQM Research estimates that the national vacancy rate in Australia is just 1%, and that the CBD vacancy rates in Sydney and Melbourne have decreased to just 3.2% and 2.5%, respectively. With Chinese students returning, it is anticipated that already constrained rental markets will experience increased pressure as 27% of the population in the sector are Chinese students.
The quantity of properties on the Australian real estate market has declined since the year began, and listings from the previous year have disappeared. Vacant housing is also on the decline.
Due to the influx of international students, this will quickly worsen in February due to a lack of supply, an increase in rental demand, and a decrease in the number of unoccupied rental homes. Rents in densely populated locations near universities will inevitably continue to climb as tenants struggle to locate suitable homes.
In the entire city of Sydney, the average weekly rent in the city is now well over $700. Meanwhile, several student housing providers have no vacancies for the rest of the year, and those that do are charging more than $400 for a single bed in a shared room.
According to experts, the 50,000 or more Chinese students who are expected to return to Australian university campuses in the coming weeks will put pressure on housing markets, driving up rents by at least 5% in central Melbourne and Sydney.