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Rental market competition heats up as visa applications surge

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According to the Interior Ministry, the number of international students applying for visas hit a record high in June when city life and international travel resumed.

Finding rental properties at this time is already difficult for prospective tenants due to high competition and few options. The surge in international students could put further pressure on an already tight rental market in Australia’s capital.

An update sent to educational institutions said, “This is the highest number of offshore applications received in a single month in the last 10 years.”

Given that international student arrivals have been much higher in the past decade than in the previous decade, June’s figures will be the highest on record.

This surge has continued so far through July, with an average of 10,000 student visa applications per week being received, an increase of almost 40% from pre-pandemic levels.

The rental market is already tight. Especially in big cities, because people are moving back to cities. This indicates increased competition and pressure on rental prices.

Property across Australia is renting out faster than ever, with a historic low of 19 days between listing on realestate.com.au and a rental property being leased in July. The day has arrived.

Across the capital, rental stocks are running low, with Brisbane at 15 days and Sydney at 21 days at historic lows.

Since the pandemic began, the number of available homes for rent has trended downward, with the total number of rental properties at the national level now almost a third below pre-pandemic levels (-31%).

This trend is even more pronounced in the region, although the number of available rentals has increased slightly in recent months.

However, while demand is rising in the capital, rental supply is also very tight, with Brisbane, Adelaide, Perth and Darwin seeing the biggest declines in available rentals.

At the same time, rental demand is growing, especially in the capital, and even more so for unit rentals. Especially in Sydney, Melbourne and Brisbane. Rising rents associated with the resurgence of urban life may be pushing renters toward the apartment market.

International students return to their cities to study at major universities.Photo: Getty

An analysis of the SA3 region, which saw the biggest year-over-year growth in the number of potential renters per listing, found that rental competition in parts of Sydney has skyrocketed over the past 12 months, with some regions has almost doubled in the number of potential renters.

Although it didn’t make the top 10, rental competition is also heating up in parts of Brisbane such as Sherwood and Nathan.

Tight supply and rising demand are putting upward pressure on rents and the strained conditions in the rental market are unlikely to ease any time soon.

Nationwide, the median rent price listed on realestate.com.au has increased by 8% in the last 12 months alone, although price pressures are increasing across the country.

Suburbs where rents have skyrocketed

An analysis of the capital’s suburbs, where median weekly rent surged, reveals where home and unit rents have risen the most as a result of tight rental markets.

We do not expect rental demand to ease any time soon, especially as international student arrivals surge. Recent arrivals to Australia are most likely to be renters, especially in the urban centers of Sydney and Melbourne.

In fact, international rental searches have also surged in recent months, with international rental search volume up 59% over the past six months as borders reopened.

Strong rental demand, low inventory supply, and potential higher rental yields may keep investors interested. However, while investor activity has recovered from Covid lows, it is still far from the levels of a few years ago, indicating that rental supply may continue to be subdued.

Tenants returning to the city will face competition from returning international students. Photo: realestate.com.au

An increasing share of investor loans indicates that rental inventory may start to rise, but at the same time demand is likely to remain high as people returning to cities compete with returning international students. there is. That means the rental market is likely to remain competitive.

However, these factors may continue to boost investors, with improved rental yields and international arrivals continuing to stimulate rental demand. Tight supply and increased competition may also make it easier for investors to pass on increased mortgage costs to renters.

Tenants are expected to face higher rents. Photo: Getty.

Continued pressure on rental prices could make buying attractive for some current tenants.

But not only will prospective buyers face higher borrowing costs, but interest rates are expected to rise sharply in the second half of this year, leaving much more uncertainty about future costs than in the past two years. More choice and less competition can create some opportunities.

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