China’s abrupt reopening sparks student accommodation crisis in Australia

Like Zhang, around 700,000 students from China enrolled to study overseas have been left in the lurch after a surprise January edict by Beijing said they would have to return to on-campus learning for their education to be recognized back home.

This has triggered a rush for accommodation even as housing markets worldwide grapple with surging rents. But the crisis is more acute in Australia because its academic year starts in February, not September as in North America and Europe.

Zhang said she “went into panic mode” as the rule change, after three years of Covid-19 border closures, meant she and about 40,000 other Chinese students also heading to Australia would all be looking for a place to stay.

“I knew that finding a rental in Australia won’t be easy, but I didn’t expect it to be this difficult. Some are subletting their living rooms or balconies. I don’t think I can do that,” Zhang, 25, said via telephone from her home in the eastern Chinese province of Shandong.

“I have been looking for a room for about a month now and I have given up,” added Zhang, who has enrolled for a masters degree in marketing at the University of New South Wales. “If I get desperate, I could even sleep rough on the streets, like under some bridge, or outside the Chinese consulate.”

The University of New South Wales, which welcomed a quarter of its students from China until 2020, said its on-campus accommodation was full and it was refurbishing university apartments to rent to foreign students.

A spokesperson for Sydney University, also with a fourth of its students coming from China, said its 2,400 dormitory beds near campus were taken and that it had booked another 700 with third-party providers and negotiated discounts with hotels to accommodate the influx.

Analysts say even those planning to defer a semester may struggle to find a bed since many construction projects for foreign students stalled during the pandemic and it takes at least four years to complete one.

Conal Newland, national head of Operational Capital Markets at Savills Australia, said the property agency was seeing unprecedented demand. “It’s a perfect storm.”

‘Big rush’

The shortage has meanwhile jumpstarted one of the few subsets of Australian residential property, the student accommodation sector, that languished during COVID.

Before 2020, Chinese students accounted for about 40% of the A$40 billion ($27 billion) Australia made educating foreigners annually. That shrank amid COVID-related border restrictions to less than a quarter of the market, which itself halved, hurt also by worsening diplomatic relations.

But China’s reopening has raised the issue about the availability of beds in a “welcome sign” for investors, said Brad Williams, managing director of AMP Capital’s diversified infrastructure trust, Australia’s third-largest owner of purpose-built student accommodation.

Tomas Johnsson, CEO of UniLodge Australia, the country’s biggest operator of purpose-built student accommodation, said some developers were even paying more to speed up construction.

Highlighting the rush for accommodation, Louis Liu, 22, a Chinese student in Brisbane, and others have started attending property viewings on behalf of students on the mainland. Liu said she films two viewings per day, for up to A$40 a piece.

In the broader property market, where most foreign students stay, rents are forecast to jump 11.5% in 2023, Westpac Banking CorpWBC.AXeconomists say, the fastest ever two-year increase. They rose about 10% last year.

Sydney real estate agent Joe Du said he rented a one-bedroom apartment to the mother of a Chinese student for A$1,050 per week, about 40% more than the next most expensive one-bedroom apartment in the neighbourhood. Public records show the unit rented for A$540 in 2022.

“We told her there was no need to bid this high, but she is genuinely concerned that her kid might not have a place to stay,” said Du. “She was in a big rush.”