China diktat condemns Aussie renters

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CoreLogic’s weekly housing market indicators report shows that rental listings across the combined capital cities have collapsed by 27.8% year-on-year led by Melbourne (-35.7%) and Sydney (-28.0%):

Australian rental listings

This comes on the back of record double-digit (10.9%) rental growth recorded in the year to December 2022 on the back of a halving of the capital city vacancy rate to only 1.2%:

Australian rental snapshot
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The rental outlook for 2023 was already poor given immigration is expected to increase to record levels on the back of surging temporary migration (mostly international students):

Temporary visa arrivals

Yesterday, the rental picture deteriorated further with the Chinese Service Centre for Scholarly Exchange issuing a directive stating that it will no longer recognise foreign academic degrees and diplomas if the study was conducted online.

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The directive has been described as “welcome news” by federal Education Minister Jason Clare and the university sector, and is expected to result in tens of thousands of Chinese students rushing to get back to Australia for face-to-face teaching before the new academic year commences in mid-February:

Mr Clare said that Chinese students were already returning to Australia, with 3500 having arrived so far this month. However government figures show that over 40,000 Chinese students (holding student visas) were outside of Australia last November, and this figure does not include those students who were still waiting on visas.

This indicates that tens of thousands of Chinese students are still outside of Australia, and are affected by Beijing’s edict.

As usual, the impact on the nation’s already tight rental market has been ignored by the government and industry, who only ever consider the benefits of immigration while ignoring the costs.

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Where are these tens-of-thousands of extra Chinese students supposed to live when there is already a dire shortage of rental accommodation for the current population?

Australia’s rental crisis is headed for catastrophe in 2023 on the back of the Albanese Government’s ‘Big Australia’ immigration policy.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.