Landlords in Victoria are bearing the brunt of the lack of international student housing demand amid border restrictions.
Juwai IQI's quarterly residential real estate report showed that Victoria has lost the most revenue from international students, shedding 10.7% or $343.8m in foreign student revenue in 2020.
Victoria accounts for more than a third of international student revenue in the whole country.
Of the top 10 worst hit universities, four are in Victoria.
The Federation University Australia lost 48% of its international student revenue, the highest of any Australian university.
Also losing a significant portion of revenue from foreign students are La Trobe University, Swinburne University of Technology, and RMIT University.
Estimates from Study Melbourne showed that prior to the pandemic, over 200,000 international students from over 170 countries enrolled in Victorian universities each year.
When will foreign students return?
Juwai IQI co-founder and group executive chairperson Georg Chmiel said while the outlook for international travel reopening seems bright, the eventual demand from foreign students is likely to be delayed.
"Three out of five international students hail from countries not considered safe for the early resumption of travel," he said.
According to the report, Australia's biggest source of international students are China (29%), India (18%), Nepal (8%), Vietnam (4%), and Malaysia (3%).
"The borders likely won’t fully reopen for these students until the ‘post-vaccination’ phase, which at best is probably going to be sometime in Q1," Mr Chmiel said.
"As travel reboots, airlines will need time to restart their services. All of this will likely push the large-scale return of foreign students to Q2 2022, just in time for the second academic term of the year."
Based on Juwai IQI's estimates, Australia will be able to welcome back around 75% of 2019's resident international student population by 2022.
However, it is unlikely that Australia will be able to achieve 100% until 2024 or 2025.
"Victoria may be the slowest to see the returning students have an impact on market conditions. They lost more students than other locations and will thus have a longer climb back," Mr Chmiel said.
While there are expectations that demand from international students will bounce back once borders reopen and health risks dissipate, the pandemic will likely have an impact on their housing preferences.
Mr Chmiel said suburbs that housed large student populations prior to the pandemic have already catered to different tenants and buyers over the past 18 months, pushing student tenants into new suburbs.
"You may see them leasing in a more diverse range of suburbs as they find that apartments in their traditional neighbourhoods aren’t just sitting empty waiting for them to return," he said.
"And you will see more students concentrate in purpose-built student housing, which offers an alternative to renting on the housing market."
Photo by Element5 Digital on Unsplash.
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