The trans-Tasman bubble between Australia and New Zealand could signal the start of a return to normal for city rental markets, according to Raine & Horne.
Announced on April 6, the trans-Tasman travel bubble enables free movement of travellers between Australia and New Zealand.
Although still a day-by-day proposition, it sets the stage for more robust inner-city rental markets longer-term, Raine & Horne’s National Manager of operations and Property Management, Maria Milillo recently noted.
“There are particular rental pockets around the country that the closure of international borders has impacted severely,” Ms Milillo said.
“From the thousands of young travellers typically spending a gap year or two in sunny Bondi Beach to the suburbs close to universities with abundant student accommodation, border closures have caused vacancy rates to rise and lower returns for some investors.”
While the travel bubble with New Zealand will not have a significant impact on inner-city rental markets, Ms Milillo said it was a start, especially with Qantas urging the Federal Government to consider travel arrangements with Singapore, Japan and Taiwan.
Singapore, Japan, and Taiwan are consistently among the top 20 sources of international students for Australian universities, according to Federal Government research.
Meanwhile, as part of the International Student Accommodation Quarantine program, the NSW Government is seeking expressions of interest from providers to help transform student housing in Sydney’s CBD into quarantine lodgings for international tertiary students.
More students will boost Eastern Suburbs university markets
Paul Spanoudakis, Principal of Raine & Horne Maroubra, said international border closures impacted rental markets around the University of NSW.
“Therefore, news of free movements between Australia and other countries will be a positive for landlords with investment properties in Maroubra, Kensington, Kingsford, and Randwick,” he said.
“Borders opening up with New Zealand won’t have a significant impact on rentals. However, arrangements with Asian countries that have managed COVID positively would be beneficial news for local investors with properties near the University of NSW.
“Moreover, with Australia’s record on COVID, it’s fair to expect more international students will want to come to our universities, which is excellent news for landlords.”
Adelaide to benefit from international border openings
In Adelaide suburbs around the University of Adelaide such as Unley, Kurralta Park, Prospect and Norwood, the pandemic only affected the rental markets for a couple of months in 2020, according to Constantine Pappas, Director, Raine & Horne Unley.
“Our rental markets are doing well now, but having international students back will have a positive long-term effect on permanent and short-term rentals as families visit students living in Adelaide,” Mr Pappas said.
“There’s no doubt that Australia’s record in managing the pandemic will encourage more international visitors to come here, including tertiary students.
“Australia is a haven, so this will underpin international student numbers not only in Adelaide but nationwide.”
Mr Pappas said that most international students in Adelaide come from Asia, so the request by Qantas to allow free movement with Japan, Taiwan and Singapore bodes well for Adelaide’s rental markets longer-term.
Melbourne student accommodation boosted by open borders
In inner Melbourne, weekly rents in suburbs close to the University of Melbourne and RMIT are down by as much as 30 per cent since the flow of international students dried up, according to Kasey Lawrence, Head of Rental Department at Raine & Horne Brunswick.
“Any travel bubbles with Asian countries with low infection rates would 100 per cent help rental markets in inner-city suburbs such as Brunswick, Coburg, Carlton, and Fitzroy,” Mr Lawrence said.
“Most of our overseas students come from Asia, so this is a move that will meet with landlord approval.”
“We have rental properties that are set up solely for the overseas student market, and they have been vacant for months. But once borders reopen, this situation should change relatively rapidly.”