CoreLogic’s January housing market report shows that rental growth across Australia’s capital cities continues to soar, driven by units:
This follows a record surge in temporary migrant arrivals, driven by international students:
CoreLogic also warns that China’s directive that it will no longer recognise foreign academic degrees and diplomas if the study was conducted online is likely to drive rental growth higher.
This directive is expected to result in 40,000 Chinese students rushing to get back to Australia for face-to-face teaching before the new academic year commences in mid-February.
According to CoreLogic:
It’s likely a resurgence in overseas student numbers will add to rental demand over the coming months, especially in light of the recent policy announcement in China where academic degrees and diplomas awarded from online studies will no longer be recognised.
With overseas student numbers surging, it is likely inner-city rental precincts and suburbs close to universities, especially those in Melbourne and Sydney, will see a further tightening in vacancy rates and upwards pressure on rents. Inner Melbourne rents are up almost 30% over the past 12 months and inner Sydney rents are more than 20% higher than this time last year.
Managing director of SQM Research, Louis Christopher, warned the rush of Chinese students would inflame Sydney’s already extortionate private rental market:
“In the CBD of Sydney at the moment there are currently 440 dwellings available for rent and we’re talking about thousands and thousands of new arrivals who want to stay around the city and universities”.
“The now expected surge in students has not been foreseen and could create an additional crisis in the rental market.”
The Grattan Institute’s Brendan Coates estimated the flood of Chinese students could wipe out one-third of the available rental stock in Sydney and Melbourne:
“Assuming that they all do come back, those 40,000 students [coming to Australia] would need something like 16,000 homes”.
“In Melbourne and Sydney, that bump would be the equivalent to about a third of the dwellings currently being advertised for rent.”
Whereas Kent Lardner, founder of Suburbtrends, warned the surge of Chinese students could force rents in inner Sydney and Melbourne up by a further 5% over the coming month:
“We usually see an increase in vacancy rates in the suburbs around the university campuses over the Christmas break, but in the coming weeks, students will be returning, and new students begin their search, which will see vacancies quickly drop to below 1 per cent in most suburbs”.
“The return of the Chinese students is likely to make this competition rather fierce, and I expect to see rental increases of at least 5 per cent in the next four weeks or so”.
This is an unmitigated disaster for lower-income households already struggling in the rental market.
The only outcome from the record tidal wave of students and migrants inundating Australia is severe rental cost inflation, financial stress, and increased homelessness.
Australia’s renters should take to the Albanese Government with pitchforks and demand that it lowers immigration to sensible and sustainable levels.
