Australia’s new, simpler visa rules for foreign students go into effect from 1 July 2016. The new rules could have a real impact on Australia’s property market, especially in Melbourne and Sydney, the biggest destinations for both foreign investors and offshore students.
By making it easier for Chinese and other overseas students, the new rules could bring more students to Australia, leading to more property investment by the students and their families. China is really the most important country when it comes to Australia’s education sector. Chinese students account for nearly one third of all international students and have the greatest potential growth in new student numbers.
Education is Australia’s largest service export and our fourth largest export overall. International students support about 130,000 jobs in Australia. Foreign students help keep the lights on. With government education funding increasingly tight, every dollar paid by an international student helps fund a place for an Australian to study.
Many Chinese families would like their children to have the benefit of studying overseas earlier than their university years. It helps them learn about the Australian system before being thrown into the deep end of the pool at uni. Guardian visas have the potential to lead to the greatest relative impact on the property market, because family members are much more likely to accompany primary-age and secondary-age children to Australia than they are their 18 to 21 year-olds.
When Australia wins a foreign student, it gains tens of thousands in education fees, additional tens of thousands in retail and services spending, hundreds of thousands in a potential real estate investment and –most important of all– the possibility that highly educated individual will decide to stay and work here and contribute to our economy over the long term. Every student who might have come here, but doesn’t, could represent substantial lost benefits. The reverse is also true.
Anything that discourages international property investment also risks causing adverse impacts the education industry. Six out of every 10 Chinese property buying inquiries made in Australia last year were related to education. Juwai.com sent about AU$1.6 billion of property buying inquiries to Australian vendors last year, and almost $1 billion of that value came from families who wanted to buy homes for their children to live in while studying here.
Anything Australia does to increase the number of Chinese students will also increase investment in strategic areas of the real estate market that generates more construction jobs, more new housing being built and more economic growth.
These visa changes are smart, and help Australia catch up to nations like the US, which offer similar visa terms. The most important elements are the Mandarin language applications, the 10-year validity pilot and the simplified paperwork.
For the most part, these changes are about avoiding the loss of our privileged place as a destination of choice for overseas students, rather than beating the competition.
More than 350,000 Chinese students went somewhere else to study last year, and these visa changes make it easier to convince some of those kids and their parents that, next year, they should come to Australia.