The inner Melbourne unit market has been flooded by student apartments listed for sale as the hundreds normally occupied by international students sit empty due to the coronavirus pandemic.
Local and international investors are looking to sell because they are unable to get regular rent from students who would have ordinarily been studying at universities across the city, agents report.
Dingle Partners director Robert Eggers said many would look to sell because the rent from student accommodation investments supplemented their income or superannuation.
Some buildings were only available for students to rent, meaning other tenants were unable to fill the void, he said.
“At the moment in the market they’re probably looking at selling because that investment is part of their super fund or part of their income,” Mr Eggers said.
Apartments that were managed by large companies specifically for students were individually owned, he said.
Data from Domain showed a massive surge in the number of one and two-bedroom apartments listed for sale in inner Melbourne, with some suburbs up as much as 192 per cent.
The data was based on new listings in suburbs where students typically rent, including Southbank, where rentals were up 192 per cent for March this year when compared with the same time last year.
New listings also rose in Melbourne (93 per cent), Clayton (50 per cent), and Carlton (14 per cent).
It is estimated hundreds of student apartments have been left sitting empty since early February, when the Australian government banned travellers from China from entering the country as COVID-19 rapidly spread.
International students, including those from China, boost the Victorian economy by billions of dollars each year.
In 2018, a record 281,000 international students enrolled in schools and universities in Victoria and generated $11.8 billion in export revenue.
Chief executive of Skysea International Group Sunny Lu said vendors, even those who have owned student-rented apartments for 10 years, were now selling up, scared the property market would drop as the coronavirus lockdown continued.
“Because everyone is facing the coronavirus and they need cash in hand,” Ms Lu said.
“Some owners may think the property market is going down and they don’t want to face drops of 30 to 40 per cent.”
Ms Lu said while more people were selling their student apartments in April than in previous years, she didn’t believe the market in Australia would be majorly affected in terms of property prices.
“I don’t think the prices will go down, it will be tough for three to six months but after this coronavirus has gone the market will pick up so quickly,” she said.
While more apartments were being listed, they were actually selling, with more than 30 sales in Carlton alone since January.
Ms Lu said she recently sold a two-bedroom apartment at 1002/570 Lygon Street, Carlton in the College Square building for $330,000 – the exact asking price.
Buyers were normally a mix of local first-home buyers or local and international investors from countries including Malaysia, Singapore and China, she said.
Ray White Victoria chief executive Stephen Dullens agreed that there had been a lift in the number of apartments for sale in suburbs.
“There has been an increase in terms for the norm, but not a huge increase,” Mr Dullens said.
What had been booming was the number of people looking to either rent out their apartments, which had previously been Airbnb accommodation, or for renters who were international students looking to stay in Melbourne, he said.
“They think that Australia looks to be handling coronavirus really well and even though they may not qualify for government benefits, they also may not get them at home in countries like South America, so they want to stay,” he said.
Ref: Senior Journalist Melissa Heagney (on 11 Apr 2020). Student apartments listed for sale in inner Melbourne as hundreds sit empty during coronavirus pandemic. Retrieved from https://www.domain.com.au/news/more-apartments-for-sale-as-international-students-stay-at-home-947251/?from=singlemessage
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