Landlords in Victoria have been hit hardest by the lack of international demand for student housing amid border restrictions.
Juwai IQI’s quarterly residential real estate report showed that Victoria lost the most international student revenue, with a loss of 10.7% or $343.8 million in foreign student revenue in 2020.
Victoria accounts for more than a third of international student earnings across the country.
Of the 10 worst hit universities, four are in Victoria.
The Federation University Australia lost 48% of its international student revenue, the highest of any Australian university.
Also losing a significant portion of foreign students’ earnings are La Trobe University, Swinburne University of Technology and RMIT University.
Estimates from Study Melbourne showed that more than 200,000 international students from over 170 countries enrolled in Victorian universities each year prior to the pandemic.
When will foreign students return?
Juwai IQI co-founder and group chairman Georg Chmiel said that while the prospects for reopening international travel seem bright, final demand from overseas students will likely be delayed.
“Three out of five international students come from countries that are not considered safe for the early resumption of travel,” he said.
According to the report, China (29%), India (18%), Nepal (8%), Vietnam (4%) and Malaysia (3%).
“The borders probably won’t fully reopen for these students until the ‘post-vaccination’ phase, which at best will be sometime in the first quarter,” Chmiel said.
“With travel restarting, airlines need time to restart their services. All of this is likely to push the large-scale return of foreign students into the second quarter of 2022, just in time for the second academic term of the year.”
Based on Juwai IQI estimates, Australia will be able to welcome approximately 75% of 2019’s international student population by 2022.
However, Australia is unlikely to be able to reach 100% until 2024 or 2025.
“Victoria may be the slowest to see the returning students impact the market conditions. They lost more students than other locations and so will have a longer climb back,” said Mr Chmiel.
While demand from international students is expected to recover once borders reopen and health risks disappear, the pandemic is likely to impact their housing preferences.
Mr Chmiel said suburbs that housed large student populations before the pandemic have already served several tenants and buyers in the past 18 months, pushing student renters to new suburbs.
“You may see them renting in a more diverse range of suburbs as they discover that apartments in their traditional neighborhoods aren’t just sitting empty waiting for them to return,” he said.
“And you’ll see more students concentrating in purpose-built student housing, which provides an alternative to renting in the housing market.”
Photo by Element5 Digital on Unsplash.
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