Foreign students are set to return after policy changes
According to the Australian Financial Review (AFR), Chinese students have been told to return to face to face learning by their government officials. This could lead to many returning to Australia as online learning is no longer acceptable or recognised back home.
In an official announcement on Saturday, the Chinese Service Centre for Scholarly Exchange said academic degrees and diplomas would no longer be recognised if the study was undertaken online.
“In order to effectively protect the interests of students who receive overseas education and maintain the fairness of education, our centre (CSCSE) will no longer provide certification/accreditation for foreign diplomas and degrees obtained during the spring semester of 2023 (Autumn semester of the South Hemisphere) and beyond,” the directive says.
“Whether the school/university term/semester has begun or not, students to return ... as soon as possible.”
The AFR notes that around 700,000 Chinese students travel to overseas universities to study each year, mainly to the US, UK, Canada and Australia. A total of 150,000 were enrolled in Australian institutions mid-last year, of which the lion’s share were university students.
This will all have a significant impact on the domestic rental market as students add to an influx of migrants, business travellers and expats returning home post pandemic. Rental markets are already tight with limited supply due to the pandemic and cost pressures across the building industry.
According to SQM research, in Sydney, rents increased across all homes by 2.2 per cent during the December alone and an eye-watering 30.1 per cent for the year. Melbourne rents rose 1.7 per cent in December and 24.7 per cent for the year while Brisbane was up 1.7 per cent for the month and 23.8 per cent for the year.
The key takeover for property investors is this — rising interest rates are being offset by rising rents. It will take at least 5 years before any meaningful supply can offset strong rental demand due to the nature of the building cycle and time it takes for zoning and applications to complete.
As we’ve been saying since mid last year, now is a great time to be adding to your investment portfolio and supporting the creation of new homes, many of which are highly demanded by the rental market.
While strong rental demand is good for investors, it does add more social angst for many vulnerable people in our community who are struggling to deal with high cost pressures. We must keep them in mind and never lose sight of the importance of a well planned rental system to keep landlords, tenants and all stakeholders happy.
Peter Esho is an economist and Co-Founder at Wealthi. He has 20 years of experience in investments and markets, publishing writing his weekly thoughts at peteresho.com