australia's unique property bubble, page-23

Good post SH,

International students rental market had indeed plays vital supporting role of rental market especially in Melbourne. One thing people may not realize is since the change of the migration rule in 2009-2010, the eligibility criteria basically will slash the migration intake by half. Student visa rules may have been relax but Asian student in particular are not just to buy education but their residency status as well. As stats showing decline enrollment thru out Australia university, don't be surprise to see that the next few quarters, we will see a major out flux of students as well. Prior 2006, there are heaps of international student taking up their residency and if you refer back to the total international student influx of china and India started in 2006 from ABS, you may see a co incidence of house price correlated with that data.

Most of the international students graduated since last year had found themselves in a position that they are not eligible to be granted permanent residency status as a result of the policy change and so called occupational demand list (except for regional area such as Perth who recently classified themselves as regional area for the sake of getting the skill migration thru)). In other words, up coming international graduates are likely to go back to their own country and on top of slowing new enrollment will create a major excess rental stocks in the major education cities.

Of course, high Oz dollar will also dampen the sector further as it drives it's international competitiveness away as compare with US,UK and Canada. Some may argue that student rental market is a small fraction of the overall market, well if you consider the impact of tens of thousands of student leaving town every new semester, I'm sure the empty apartment in Mel is the best statement spoken itself. DYOR on the international education sector and the recent outgoing TR from ABS, you sure will sniff what is in the headwinds.

Well, market will dictate the equilibrium over the time. No doubt property is always a good investment if you buy at the right price or for own use purposes rather than speculation.

Cheers all and have a great weekend!