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Understanding Australia’s Rental Crisis (and What it Could Mean for International Students)

The closure of Australia’s borders for almost two years due to the COVID-19 pandemic meant many international students were unable to enter the country. As a result, every industry linked to the international student community was drastically changed. Possibly one of the most heavily impacted industries was accommodation, namely student accommodation providers, which primarily rely on international students to occupy their rooms.

After a challenging couple of years, the return of international students to Australia post-COVID was anticipated with optimism. Education providers and accommodation providers alike have been readying for the arrival of international students, particularly in 2023, a year during which international students are expected to return “en masse”. This is not only due to the border reopening but also because face-to-face learning requirements are back in place for international students this year. In the coming years, the number of international students coming to Australia could grow even further, especially if UK PM Rishi Sunak moves forward with limiting the number of international students allowed in the UK.

However, the road ahead isn’t lined with just optimism. Australia is currently facing a rental crisis – one of the worst it has seen in over a decade. Not only are rentals flying off the market, but rent prices are rising to record levels. So, what could this mean for international students who are trying to find housing in 2023?

Below, we explain the most important details you need to know about Australia’s accommodation shortage, what it could mean for you and how to prepare.

Understanding Australia’s rental crisis

With high levels of competition amongst renters, properties are getting scooped up incredibly quickly (on average, 19 days as of October 2022). Across the nation, property inspections are being flooded with people; some listings are seeing hundreds of prospective tenants lining up outside just to view the property.

@ciara_olo Crazy stuff 😳 #sydney #sydneyrentals ♬ original sound – Ciara O’Loughlin

Additionally, with more demand for rentals and not enough supply, rental prices are soaring across the country.

A leading source of property data, CoreLogic, indicated that the number of empty properties has almost halved in the last 12 months, with the vacancy rate falling from 2.1 per cent to 1.2 per cent. CoreLogic also revealed that renters are being forced to pay more to secure a rental, with national rental rates having increased by 10.2 per cent over the last year.

7News echoed these findings, highlighting that rent prices in every capital city increased significantly last year. The highest increase was in Brisbane (a 13.4 per cent spike) while the lowest increase was in Canberra (a 4.3 per cent uptick).

What the rental crisis means for international students

Rajarshi Rai, an international student from India, revealed how difficult it was for him to find a home when he arrived in Australia, which led to him spending over $200 per night on hotels. He lived this way for approximately a month while actively seeking a rental.

“I would sometimes do three inspections within an hour, going from address to address, and lowering my expectations each time,” Rajarshi said. “It came to the point in which I was offering landlords 12 months’ rent in advance – anything to get out of a hotel.”

Cases like Rajarshi’s were not uncommon when borders first opened in late 2021 as cities struggled to fully accommodate the sudden increase in demand. Speaking to SBS, multiple international students from China shared their own struggles to find a home back in August 2022.

“I didn’t expect the competition for renting to be so fierce,” said one student named Ms Chen. “[I] had friends go to the inspections of nearly 20 places for me and I applied for them all afterwards, [I] even tried to pay a higher rent but I didn’t receive any offers.”

Therefore, there is much speculation about whether Australia’s rental market can handle the predicted surge in international student numbers in 2023.

Those seeking student accommodation may struggle to find a spot, says CISA President

According to the President of the Council of International Students Australia (CISA) Yeganeh Soltanpour, the rent spikes could lead to decreased chances of finding a home. She also highlighted that many people may struggle to meet rental prices as the cost of living rises.

“Cost of living increases but wages don’t, so finding a viable living space is harder than ever,” she said.

Former CISA President Oscar Ong also mentioned that when students first come overseas, their first choice is often student accommodation – a dream that isn’t always attainable.

“With all the student accommodations nearly fully filled, students have no choice but to turn to [a] private rental,” said Oscar. “[As a result,] we also see an increase in dodgy landlords [that provide] unfair contracts, rent bidding, changing the rental cost without telling the student, which leads to exploitation due to the students’ limited experience.”

It is suspected that with an influx of students, we may see situations like this become more common.

Rental scams in Australia

Oscar raises an important concern among renters across the country. One recent news story about a Sydney-based head tenant who deceived their flatmates into unknowingly paying for their portion of the rent has been making the rounds, shedding new light on rental scams. These rental scams are particularly concerning for international students who may be less familiar with their tenant rights in Australia.

As such, to protect yourself against rental scams, ensure you familiarise yourself with the rental rights body in your state or territory:

Preparing yourself for an uncertain future

Australia’s rental landscape is constantly evolving and student accommodation providers are making moves to adapt to it. According to a report published in December 2021 by Savills Research, the purpose-built student accommodation sector has been anticipating this influx since the border reopened.

As such, many of the top owners and operators – such as Scape, UniLodge and YSuites – launched new development projects to create more beds for international students. These development projects were programmed for 2023 and beyond, with investment in these initiatives expected to remain strong.

In terms of private rentals, the outlook of the market in 2023 is largely unclear. The best international students can do is inform themselves of best practices to improve their chances of securing a property.

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16 February: An earlier version of this article published on 23 January 2023 misattributed the quote “Cost of living increases but wages don’t, so finding a viable living space is harder than ever.” to Oscar Ong. It has been changed to correctly attribute Yeganeh Soltanpour.