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Foreign investors and students boosts Australia’s property sector

"Recent rule changes have made it easier for students to remain in Australia after graduation, including becoming permanent residents.

Foreign investors and students boosts Australia’s property sector

"While any net immigration will boost demand for housing, the nature of that demand will depend on the life stage and circumstances of the newly arrived residents. The high fraction of students and former students in the flow of new migrants to Australia implies that the households they form will be younger than average, have lower incomes (at least initially) and be less able to purchase property (without familial assistance) than the average household already resident in Australia.

"This might result in lower home ownership rates than if migration had been lower or less concentrated in student visa entry. Student migrants will also be more likely to demand housing that is close to universities, city centres and other amenities rather than detached houses on the fringe of cities."

So a rise in foreign student numbers should mean a rise in demand for rental accommodation in what already are housing hotspots.

The two cities feeling the housing heat most are the prime foreign student destinations, "It is also noteworthy that NSW and Victoria receive a disproportionate share of net student arrivals – more than two-thirds of the total – with projected contributions to total annual population growth of around half a percentage point, compared with 0.3 percentage points or less in other states."

By way of comparison, NSW's total population growth last year was 1.4 per cent and Victoria's 1.8 per cent.

Planning for and investment in relevant housing now could avoid that when selling education and its related lifestyle and cultural benefits.

Experts are of the opinion that it looks like the sharp rise in demand for investor-supplied rental accommodation will only grow in the current and following decades as more foreign students are accepted into Australian universities and need somewhere to live while they are being schooled and prepared to grow the Australian economy when their turn comes to be released into the workforce.

 

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