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A flood of Chinese students is set to send rents soaring across Australia as landlords cash in on Beijing’s ban on online study.

China announced on Saturday it would not recognise degrees earned online through foreign universities – forcing students to instead study overseas in person. 

With classes due to start within weeks, about 50,000 new Chinese students are expected to rush into Australia and compete with locals for rental properties which are already in high demand.

The biggest rental rises are expected in Melbourne, Sydney and Brisbane as prospective tenants bid-up asking prices.

‘Most landlords are going to be looking to put up rent,’ said Cameron Kusher of the property advertising REA Group.

Students are pictured queueing to look at a rental property, with prices set to soar within weeks

Students are pictured queueing to look at a rental property, with prices set to soar within weeks

‘Now, obviously some people are going to be able to stomach that increase in rent (but) others won’t be able to,’ he told 7News

It’s expected finding inner-city apartments in Australian destinations popular with Chinese students will become particularly difficult.

‘A lot of the students that have come from overseas are relatively wealthy, so they can pay higher prices for these properties than maybe local students can,’ Mr Kusher said. 

Phil Honeywood, of the International Education Association of Australia said his organisation was ‘taken by surprise’ by the suddenness of the Chinese ruling.

‘We were hoping for a longer transition period,’ he said.

Mr Honeywood said China’s former policy of only allowing families to have one child is also a huge factor on the coming rental property squeeze.

‘We find that Chinese students, coming from one child only families, like to often have their own apartment,’ he said. 

Students are pictured at the University of New South Wales in Sydney. Rental prices are set to soar with the sudden influx of 50,000 Chinese students to Australia

Students are pictured at the University of New South Wales in Sydney. Rental prices are set to soar with the sudden influx of 50,000 Chinese students to Australia

The unexpected sudden influx of 50,000 more people looking to rent comes on top of what had already become a rental crisis across Australia in the last 12 months. 

Nationally, rents rose 6.7 per cent to a median of $495 per week in 2022, but the issue was much worse in capital cities.

In cities such as Melbourne and Sydney, higher post-Covid demand for fewer properties saw unit rents up by 9.3 per cent, while houses went up 8.3 per cent.

Kent Lardner, founder of Suburbtrends, said the return of Chinese students is likely to make the competition for apartments and houses ‘rather fierce’.

‘I expect to see rental increases of at least 5 per cent in the next four weeks or so,’ he told the Australian Financial Review

Mr Lardner said vacancies will ‘quickly drop to below 1 per cent in most suburbs’. 

Karen Zhang is one of the Chinese students taken by surprise at her country’s sudden decision that people had to return to in person learning. 

She has previously studied finance online with the University of New South Wales in Sydney from her home in Guangdong province in China.

But now she is desperate to get to Australia before classes start on February 20 to finish her last semester of study.

Her biggest problem will be finding someplace to live.

‘My life plans have been disrupted … I planned to go to a city (in China) to work as an intern, and I have already got the offer and found accommodation there.

‘Now I have to cancel everything and arrange to return to Australia immediately,’ she told the ABC.

In capital cities in 2022 unit rents were up by 9.3 per cent, while houses went up 8.3 per cent

In capital cities in 2022 unit rents were up by 9.3 per cent, while houses went up 8.3 per cent

The Department of Education said it welcomed the return of Chinese students to Australia and that the ministers for education and home affairs were working with universities to address the ‘short-term logistical issues’ of the sudden change.

Melbourne migration agent Kirk Yan said student-visa applications had increased since the order was issued.

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‘In the long run, I believe it’s a good sign that the international-student market enters the post-pandemic era,’ he said.

Airlines flying from China to Australia are also struggling to cope with the sudden huge demand for flights. 

They have been inundated with calls from students desperate to get onto already packed planes. 

State and territory breakdown on advice for renters

 State/territory

 

 

 

NSW 

 

 

 

 

Victoria 

 

 

 

 

 

 

Queensland 

 

 

 

 

 

 

 

WA 

 

 

 

 

 

SA 

 

 

 

 

 

 

Tasmania 

 

 

 

 

 

 

ACT 

 

 

 

 

 

 

 

 

 

 

 

NT 

How often can landlords increase rent for a periodic lease?

 

Once every 12 months for periodic leases.

 

 

 

Once every 12 months for periodic leases. 

 

 

 

 

 

Once every 6 months. 

 

 

 

 

 

 

Once every 6 months. 

 

 

 

 

 

Once every 12 months. Rent cannot be increased in the first 12 months of the lease. 

 

 

 

Once every 12 months, after the tenancy agreement began or was renewed.

 

 

 

 Once every 12 months from the date of the last increase.

 

 

 

 

 

 

 

 

 

Once every 6 months and not within the first six months of the lease. Rents can only be increased if the right to do so has been written into the tenancy agreement. 

 How much notice must they give you?

 

At least 60 days (written notice).

 

 

 

 

At least 60 days (written notice)

 

 

 

 

 

 

At least 2 months (written notice). The notice must include the date and amount of increase.

 

 

 

 

At least 60 days (written notice). 

 

 

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At least 60 days (written notice).

 

 

 

 

 

 

At least 60 days (written notice).

 

 

 

 

 

At least eight weeks written notice. 

 

 

 

 

 

 

 

 

 

At least 30 days written notice. The notice must state the intention to increase the rent, the amount increase and the date it changes.

 

Source: Each state/territory’s Residential Tenancies Act. 

Rental increases deemed ‘excessive’ are different in each location, but generally, rental bodies deem increases to be excessive if they are too different from similar market rents, if there’s a sizeable difference compared to the current rent, or if the property has outstanding repairs needed.

‘The key culprit is household formation’

Dr Thomas Sigler, the deputy head of the School of Earth and Environmental Sciences at the University of Queensland, explains the huge role the number of people in a dwelling plays in rental property availability. 

‘The key culprit is household formation. Typically we’re inclined to correlate population growth with demand – so we need more dwellings for more people.

‘Typically, 2.5 people was the median household size. But what happened during Covid was that household size reduced to 2.4 people. 

During Covid the typical household size reduced from 2.5 people to 2.4 people. Pictured is a house for lease in Melbourne

During Covid the typical household size reduced from 2.5 people to 2.4 people. Pictured is a house for lease in Melbourne

‘That doesn’t sound like a lot, but it’s a 4 per cent reduction. That means there are 4 per cent more renters looking for properties.

‘The reason that happened is because people wanted more space during the pandemic. For example, people, rather than having three flatmates, had two flatmates plus a Zoom room.

‘People wanted more space for their home offices, they didn’t want as many roommates for health reasons, people wanted to move out from mum and dad’s house, and that led to an uptake in household formation that outstripped supply.

‘It wasn’t population growth that outstripped supply, it was household formation that outstripped supply.’

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