Competition in the rental market continues to intensify as offshore rental inquiries spiked through January, according to data from realestate.com.au.
Between December and January, the number of inquiries to rent a home in Australia by people currently abroad doubled, an increase of more than 200% compared to 12 months ago.
China (excluding Hong Kong) overtook New Zealand as the largest source of offshore rental inquiries in January, recording a staggering 3x increase in inquiries in a month.
Hong Kong and India followed, with 220% and 120% increases in monthly inquiries respectively.
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Searches from outside Australia are increasing.Photo: Getty
The return of international students has been a major driver of this growth. In particular, the Chinese government’s mandate for citizens studying at international institutions to return to face-to-face learning.
According to the Ministry of Education, as of November 2022, 34% of Chinese student visa holders will remain outside Australia, equivalent to 40,054 students. Across all countries, there were a total of 88,550 international student visa holders outside Australia in November.
The return of international students is clearly visible in the Australian rental market. Many of the most inquired suburbs are close to major universities.
Student suburbs featured prominently among the most inquired suburbs in January. Melbourne and Carlton, close to the University of Melbourne and his RMIT, had more offshore rental inquiries in January than any other suburb in the country.
Other college towns in the top 10 were Clayton, Victoria, and Chippendale and Waterloo, NSW.
Australia is expected to see net migration of 180,000 people in the fiscal year ending June 2023, increasing to 213,000 next year and reaching 235,000 thereafter, based on the latest government projections.
But those projections are likely an underestimate, and Treasury Secretary Jim Chalmers has acknowledged that the actual numbers are on track and likely to exceed the government’s projections.
New immigrants and international students are much more likely to rent than buy when they first come to Australia, further increasing demand in an already very tight rental market.
Sydney and Melbourne are likely to bear the brunt of increased rental demand, especially in city centers and university suburbs.
Even before migration fully resumed, a shortage of rental housing was driving vacancy rates to record lows in many suburbs.
Now that migration is in full swing, the need for all levels of government to work together to facilitate the provision of more rental accommodation is more important than ever.