By KATRINA CREER
A pilot program to allow a limited number of international students to return to Sydney has been welcomed by the REINSW as critical for the rental market recovery.
The recent announcement by the State Government could see the start of a gradual arrival of students from a range of countries within the next six to eight weeks, through a strict quarantine program.
REINSW Chief Executive Officer, Leanne Pilkington said it could still take as long as 18-months for the rental market to recover with many landlords who were unable to find a tenant now locked into cheaper lease agreements.
“The return of international students is very positive news especially in suburbs close to universities that have been hit hardest by the COVID-19 pandemic and border closures, “Ms Pilkington said.
“It has been tough on landlords and real estate agencies – it is not uncommon to hear of offices with a medium rent roll losing as much as $300k in fees in the past year because of high vacancy rates.
“On top of that some agencies have had to hire extra staff to assist with letting properties as well as spending more on advertising and marketing to get these properties leased.”
International students are considered a vital part of the State economic recovery and were worth around $14.6 billion in 2019. Typically, there are more than 250,000 international students studying in NSW each year which directly support 95,000 local jobs.
“International education is our second most valuable export and we need to do what we can to help students return and revive this sector as quickly as possible,” said Treasurer Dominic Perrottet.
Latest figures from CoreLogic show unit rents in Sydney are -7.5 percent below their 2018-high and have fallen 3 percent from a year ago. Suburbs recording a drop in rental returns include Chippendale, Pyrmont, Zetland, Waterloo, Glebe and Erskineville.
REINSW member Nicholas Efrossynis, who is the director and licensee-in-charge of Laing + Simmons Kingsford, also welcomed the announcement by the State Government that will allow 250 overseas students to return per fortnight from mid-year.
Residential rents in his area, close to the University of NSW, dropped 30 percent ‘virtually overnight’ at the start of the lockdown last March. Many properties are sitting vacant for as long as five weeks in between tenants.
“There are deals being done with tenants asking for the landlord to pay utilities or one week’s worth of free rent – even though rent has come down substantially, the tenants will still ask for it because they know they can,” Mr Efrossynis said.
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