BREAKING NEWS
International Students Boost Australia’s Rental Market as They Account for 4% of Total Properties
Melbourne, Australia (March 10, 2024) – Figures released by the Australian Institute of Quantity Surveyors and Property Research have revealed a surprising trend in the Australian rental market. According to the report, international students are now accounting for around 4% of all properties rented in the country.
This significant increase comes as no surprise to housing experts, who have noticed a growing demand for residential properties in major cities due to the influx of overseas students. The report’s findings indicate that international students are not only renting high-end properties but also being priced out of the overall rental market.
"We had anticipated this trend, as international students have become increasingly attracted to Australia’s tertiary education system," said Paul Johnson, Director of Strategic Insights at the Australian Institute of Quantity Surveyors. "Their presence has further pushed up the demand for housing, leading to skyrocketing rental prices."
Other statistics from the report highlights include:
- 53% of international students settle in major cities, further driving up rental prices and housing demand.
- Property owners are now targeting investors from China, India, and the United States for short-term rentals.
- Rental prices have increased 20% in the last quarter, with the National Rental Index showing a average rent of $450-500 per week.
"As a result of this market shift, property owners will need to adapt their current rental strategies to cater for this new demographic," mentioned Ms. Johnson. "In addition, policymakers would need to address the elephant in the room – availability of affordable housing for Aussie families and young professionals competing with international students for shelter."
This news comes with the backdrop of ongoing Australian housing affordability concerns, emphasizing the need for policymakers, investors, and property experts to address the issue.
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A quote from a news article:
Ms McKenzie told the panel that up to 760,000 visas had been approved for international students in the past year.
“I was talking to one of our universities in Victoria the other day and they said the international student market only takes up four per cent of the housing,” Ms McKenzie said.
“I said ‘four per cent? You do realise if we released four per cent of the rental market back, we wouldn’t have a rental crisis?’ But you know I said we’re not going to do that but you have to make sure we’re keeping pace in terms of accommodation we’re providing for Australians and for students.”
My comments:
Some people claim that international students only stay in purpose built accommodation and have no impact on the rest of the rental market. Sorry, that's wrong, and/or wrong-headed. Let me explain.
1) Plenty of foreign students stay in other types of accommodation. I am an Australian citizen but was overseas until year 11 and came back to study essentially as a foreign student. I mixed mainly with foreign students and my parents were overseas. I know for a fact, most of them lived in share housing in University (and this largely applies to those that come for high school as well). A lot of us would try to live in small houses and apartments near the university. But some would rent in further suburbs and drive or take public transport to university. Very few of us stayed in purposed built student accommodation for a long time. I spent one year in one of the Colleges of Melbourne U, and so did a couple friends of mine. But almost everyone else was off campus in normal terrace houses or apartments in inner suburbs or more normal houses further out.
2) I recognise that in the years since, there have been more purpose built student accommodations built, and the proportion of students using those has risen. But the affluent, that is, those willing to pay for the high university fees in Australia (oh wait… that's MOST of the foreign students) often want to live in slightly nicer places, and they range from those that rent places to those whose parents just buy them a house for them to use for the duration of their stay (and, again, I found that a surprising number of my friends' parents did just that). Those houses that were purchased, a lot of them were in normal residential suburbs.
3) As essentially an ex-foreign student myself, you would think that I'd be against people blaming foreign students for the rental crisis. But what I hate more than that is stupid politicians and illogical journalists making stupid illogical statements based on imagination, not even conjecture, and certainly not facts.
3) EVEN IF one was to concede that 95% percent (or whatever) of the international students stayed in purpose built accommodation, you still have:
3a) Investment that went into that type of building COULD have gone into other types of accommodation. But because there's such a huge student population, investors and developers have chosen to build this instead of accommodation catering to other segments. Clearly, this puts downward pressure on rental stock in non-student segments. It's substitution of the use of capital, from building non-student housing, to building student housing.
3b) If the number of foreign students were halved, let's say, that would free up half of the purpose built student accommodation, and the owners would, rather than leave it empty, encourage non-students to reside there. Those small bedsitters would be suitable for low income singles and some of the larger units would suit young couples. That would take a LOT of pressure off the overall rental market. With a national vacancy rate of 1.4%, and 1% or lower probably, in some major city suburbs, if students made up 4% and you free up 2% of total accommodation by halving them, then you have THREE times as many vacant properties. Sure, 2/3 of these would be small units, but, like I said, singles and couples can go there, which means they are no longer targeting group houses for 4-5 people, which helps families as they are competing with less people to find a place to rent… etc.
View info-news.info by BaconJP