Man, what a mess.
I’ve seen some crazy things in my time in the property market, but this almost takes the cake.
I’m talking about the decision to ramp up immigration to all-time record levels, in the middle of a housing crisis.
A lot of times in government, the left hand doesn’t know what the right hand is doing.
And so at some point you’d think there might be conversation along the lines of: “Is now a good time to ramp up immigration in a epic way?”
“No, actually. There’s nowhere to house them.”
But that conversation never happens. It never happens because no one is really responsible for housing, and even if there was, it’s not clear that the people who decide on immigration and international student numbers would even be talking to them.
And the end result?
We’re pouring fuel on the fire of the housing crisis, and international students are sleeping in tents:
The rental crisis in most capital cities is so severe that international students are resorting to extreme strategies that, depending on their financial circumstances, range from living in tents to fronting up to buyers’ agents with a $5 million budget, with a fresh surge students due to arrive mid-year.
Purpose-built student accommodation is at 100 per cent capacity with some operators closing their waitlists as future availability blows out to years.
With no new purpose-built accommodation due to come on line for another 18 months or more, experts say the flood of new students mid-year will further inflame an already critical situation.
An influx of 43,000 Chinese students in just one month after Beijing instructed them to return to their overseas campus, combined with record levels of new Indian student enrolments, have resulted in 573,000 students in Australia in February.
Come to Australia, they said. Enjoy the wide open spaces, they said.
Of course, the natural consequence of this policy blindspot is to push rental prices and house prices higher.
Property prices are responding to the lift in rental yields, but also to new demand from international students themselves:
Cate Bakos, a Melbourne-based buyers agent, says she has had a huge surge in international students approaching her to help find a rental property – something that was unheard of a year or so ago.
But she’d had two clients who had opted to buy because the rental market was so tight.
“One client had a budget of $5 million. It was a lot more than they needed,” she said.
Yep, and as the dumpster-fire that is the rental market gets worse, expect to see more people digging deep to try and buy and escape it.
.. which only pushes property prices higher again.
JG.