Students are coming back! How will this affect the real estate market?

New data on university revenue reveals the impact that missing international students have had on the Australian real estate market.

Missing international students have had a direct effect on landlords who specialise in leasing residences to these tenants, and fewer students mean increased vacancies and lower rents.

According to the Mitchell Institute Australian universities lost $868.1 million worth of international student revenue in 2020, compared to 2019.

That equates to 2.5% of their nearly $35 billion oftotal revenue. However, landlords with apartments in the CBD have been hit harder. 

According to their report, landlords have lost an even larger share of foreign student rental income. Even though they lost some enrollments, universities have managed to enroll more than 100,000 international students who are living overseas and studying remotely.

But these offshore students occupy no Australian apartments, sign no leases, and pay no rent.

Victoria has been hit the hardest when it comes to lost international student university revenue and property market impact.

The state lost $742 million of its foreign student rental revenue in 2020.

It was announced that starting December Temporary Visa holders including students will be allowed to come back to Australia as long as they have been vaccinated.  Most of these arrivals will come back to occupy the inner city rental market that has been hit most by their absence.

With rental vacancies lower and rents slowly rising again, investors will likely find these areas more appealing.

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