Highlights
- An extended rental peak season may drive a sluggish buy-to-let market, a real estate insider said
- In large cities like Melbourne and Sydney, vacancy rates are at an all-time low (1 per cent)
- More than 40,000 Chinese students may return to Australia after the Chinese government stopped accrediting overseas online learning qualifications
For Fangjian Zhang, a Chinese student studying abroad, his recent life plans were "significantly disrupted" by a recent announcement by Chinese authorities.
Mr Zhang is currently in the final semester of his Master's degree at a university in Shanghai, while he applied for a Master's degree in environmental law from the University of Melbourne to complete his second Master's degree in Australia.
Due to the conflict between the start of the University of Melbourne’s academic year in March and Mr Zhang's domestic Master's workload, he says he had planned to complete two online courses in the first semester of university in China, before travelling to Melbourne in April.
However, the states that "…the centre will no longer provide accreditation services for foreign diplomas obtained through distance learning, including new enrolment and continued learning".
For Mr Zhang, the announcement means he has no choice but to bring his plans forward and begin his Master’s in Australia in March.
"In that case, I cannot attend the offline graduation exam for my domestic Master's degree, which will thus cost me my diploma," he said.
"And my PhD application also has to be suspended (if I'm not in China)."
Chinese student Fangjian Zhang had planned to come to Melbourne in April or May, but his plans have been "all messed up". Credit: Supplied
When this policy was announced, the start of the Australian tertiary sector’s semester was just weeks away.
Chinese Consul General in Brisbane Ruan Zongze told SBS Chinese that China's accreditation of overseas online qualifications was a "special arrangement" during the pandemic and that it's "time to return to normal".
"We have to make it clear that it's now time to say goodbye to offline or remote study, we encourage students, parents and teachers to have more face-to-face study," he said.
After the policy sparked heated discussions among international students, the Service Centre provided further details on the new policy, stating that "…in the case of a visa failure to issue in time, flight cancellation, and dormitory reservations, students can keep relevant supporting materials ...in order to successfully pass the certification".
Tenants may face ‘the toughest year’
Richie Pan, a leasing consultant from Triple S Rental in Sydney, said that since the policy announcement, he has received many inquiries from international students in China on WeChat and email.
"I even received a lot of inquiries from parents of international students, and everyone seemed to be worried about accommodation after coming to Sydney," Mr Pan said.
"They [Chinese students] basically choose to live in a city or a community near a university, and the housing shortage is certainly difficult to alleviate.”
Tony Huang, a property manager at Austrump Hosting, said his department was "totally overloaded" and that it was common for a property to receive dozens of applications.
After six years in the industry, Mr Huang is mainly responsible for apartment rentals in the Melbourne city centre.
Every day, we get countless phone calls asking to see properties and asking us to arrange leases.Tony Huang
"[Tenants] will make it clear on the phone that they will add money, or rent for two or three years longer, or pay rent for one year or half a year in advance,” Mr Huang said.
"It's fair to say this year [for tenants] has been the toughest year since the pandemic.”
It's common in big cities that tenants offer a higher rent to secure a property. Source: SBS
‘A positive signal’ for the buyers’ market
Mr Huang believes the continued influx of Chinese students had extended the peak season in the rental market longer this year than before.
"In previous years, our peak season [for renting] began to fade two or three weeks after the Spring Festival," Mr Huang said.
"But this year is not a good predictor. If all [Chinese students] come back, it may last until June or July.”
He said this was "a positive signal" for Australia's persistently depressed housing market.
According to CoreLogic, house prices in Australia are falling at record-breaking levels, a drop of 8.4 per cent between May last year and January 2023.
Among them, Sydney house prices fell the most in the recent decline, plummeting 13 per cent from the previous high, while Melbourne house prices also fell 8.6 per cent from their previous peak.
"But as tenants continue to enter, the continued popularity of the rental market will drive up investor confidence," Mr Huang said.
"They (investors) will think that Melbourne houses will have more investment potential, more investors will enter the army of Melbourne buyers, and reverse the house price slump.
"But it will take some time, because it is just starting to flourish, and it may be a few months (before this happens)."
Property industry insiders believe that a continued hot rental market could boost the sluggish Australian property sector, but "it will take some time". Source: AAP
Vacancy rates are at an all-time low
Mr Huang said that tenant renewals and landlords transferring to short-term rental arrangements had led to a decrease in the number of listings on the market, exacerbating the rental crisis.
According to the total number of listings available for rent in December 2022 fell by 19.5 per cent year-on-year from the previous year, the sharpest fall since 2003.
According to the latest data from Domain, the vacancy rates of the two most popular cities for studying abroad, Sydney and Melbourne, fell to 1 per cent in January, a record low.
"Many tenants choose to renew their leases rather than move out because they see that rents are increasing," Mr Huang said.
"Also, many landlords are switching to the short-term Airbnb rental market after seeing the booming rental market, which is more profitable for them."
In addition, Purpose-Built Student Accommodation (PBSA) is saturated in many Australian cities, with zero vacancy rates expected in Brisbane, Perth and Adelaide in 2023, according to a report released late last year by the Student Accommodation Board, a division of the Property Council of Australia.
The tight supply-and-demand relationship has also led to a continuous increase in the rent of student dormitories in many places. According to a new report released by Savills Research in December, rents for purpose-built student accommodation in Brisbane have risen by more than 30 per cent in a year, even surpassing Melbourne and Adelaide.
The report said the increase was likely to continue as there was no new supply of student accommodation in Brisbane over the next three years.
Tony Huang has been working at a real estate company for six years and is in charge of the apartment rental market around Melbourne CBD. Source: SBS / Yue Gong
Rent increase rate is slowing down
The strain faced by tenants is expected to ease as the rate of rent growth begins to slow.
Corelogic reported that rent growth was 2 per cent in the December quarter, a slowdown compared to the 2.3 per cent quarterly rent growth in September.
Data released by PropTrack on the same day also showed stable rental growth in the December quarter.
However, some industry insiders suggest that the outlook for the rental market in 2023 remains uncertain.
Eliza Owen, from Corelogic, said the government's demographic report released in January predicted that this would put upward pressure on rents, particularly in popular areas of Sydney and Melbourne, as normal migration patterns returned.
Last year, Australia experienced its largest-ever rent increase, with overall national rents jumping by 10.2 per cent.
As of January 28, Sydney rents rose 29.2 per cent year-on-year and 7.9 per cent from pre-pandemic 2020, according to the latest data from SQM Research.
Since Australia reopened its borders at the end of 2021, many places have been plunged into a rental crisis, with a Chinese student previously telling SBS Chinese that the weekly rent for his 16-square-metre student apartment in Melbourne city was as high as AUD$519 per week.
Charles Cheng, a property consultant at McGrath in Sydney, said the rental crisis would last "for a long time".
"In terms of supply and demand, there aren’t enough properties on the rental market. As long as this situation continues, renting can be more challenging,” Mr Cheng said
"If an international student comes over [from China], they might have to go through all the agencies before they can get an apartment."
