China’s abrupt reopening triggers student accommodation crisis in Australia

  • 40,000 Chinese students face zero rental vacancies in Australia
  • Australia rents up more than 20% in two years
  • Universities, accommodation companies speed up construction

SYDNEY, March 1 (Reuters) – For Zoey Zhang, a student from China heading to a top Australian university, finding accommodation Down Under has been difficult – so much so that she has even considered sleeping “rough on the street”.

Like Zhang, some 700,000 students from China registered to study abroad have been left in the lurch after a surprise January edict from Beijing said they would have to return to on-campus learning for their education to be recognized at home .

This has sparked a rush for accommodation, even as housing markets around the world struggle with rising rents. But the crisis is more acute in Australia because the academic year starts in February, not September as in North America and Europe.

Zhang said she “went into panic mode” when the rule change, after three years of COVID-19 border closures, meant she and about 40,000 other Chinese students also heading to Australia would all be looking for somewhere to live.

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“I knew it wouldn’t be easy to find a rental in Australia, but I didn’t expect it to be so difficult. Some people rent out living rooms or balconies. I don’t think I can do that,” Zhang, 25, said via phone from her home in the eastern Chinese province of Shandong.

“I’ve been looking for a room for about a month now and I’ve given up,” added Zhang, who is enrolled in a master’s degree in marketing at the University of New South Wales. “If I get desperate, I can even sleep rough on the streets, like under a bridge or outside the Chinese consulate.”

The University of New South Wales, which accepted a quarter of its students from China until 2020, said on-campus accommodation was full and university apartments were being refurbished to rent to overseas students.

A spokesman for Sydney University, also with a quarter of its students coming from China, said the 2,400 dormitories near the campus were taken and it had ordered a further 700 from third-party suppliers and was negotiating discounts with hotels to accommodate the influx.

Analysts say even those who plan to postpone a semester may struggle to find a bed since many construction projects for foreign students have ground to a halt during the pandemic and it takes at least four years to complete one.

Conal Newland, national head of Operational Capital Markets at Savills Australia, said the property agency was seeing unprecedented demand. “It’s a perfect storm.”

‘BIG rush’

The shortage, meanwhile, has kicked off one of the few subsets of Australian residential property, the student housing sector, that disappeared during COVID.

Before 2020, Chinese students accounted for about 40% of the A$40 billion ($27 billion) Australia spent on educating foreigners annually. This shrank amid covid-related border restrictions to less than a quarter of the market, which itself was halved, also hurt by deteriorating diplomatic relations.

But China’s reopening has raised the question of bed availability in a “welcome sign” for investors, said Brad Williams, chief executive of AMP Capital’s diversified infrastructure trust, Australia’s third-largest owner of purpose-built student accommodation.

Tomas Johnsson, chief executive of UniLodge Australia, the country’s largest operator of purpose-built student accommodation, said some developers were even paying more to speed up construction.

Highlighting the rush for accommodation, Louis Liu, 22, a Chinese student in Brisbane, and others have started attending property viewings on behalf of mainland students. Liu said she films two shows per day, for up to US$40 a piece.

In the wider property market, where most overseas students live, rents are forecast to jump 11.5% in 2023, Westpac Banking Corp ( WBC.AX ) economists say, the fastest two-year increase on record. They rose around 10% last year.

Sydney real estate agent Joe Du said he rented a one-bedroom apartment to the mother of a Chinese student for $1,050 per week, about 40% more than the next most expensive one-bedroom apartment in the neighborhood. Public records show the unit was rented for $540 in 2022.

“We told her that there was no need to bid so high, but she is genuinely worried that her kid might not have a place to live,” Du said. — She was in a great hurry.

($1 = 1.4863 Australian dollars)

Reporting by Stella Qiu and Byron Kaye in Sydney; Editing by Himani Sarkar

Our standards: Thomson Reuters Trust Principles.

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