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Tuesday, 20 December 2016

Full time student enrolments march on past 1 million

International student snapshot

One of the key drivers of immigration over the coming years will be the surge in international students.

There were already well over 300,000 over them in Australia last year, mostly based in Sydney and Melbourne, with the figure today likely to be closer to 330,000.

Here's a quick snapshot where they were studying, and where they came from by country, which is to say mainly China:

Since 2012 and the depreciating of the Aussie dollar there has been a very strong growth in the number of international students, which is expected to continue.

The visa processing rules for international students were simplified or 'streamlined' effective 1 July, and there was a huge 47 per cent year-on-year jump in education arrivals in October.

Due to term times, the big months for education arrivals are January/February and July, so it will be interesting to see if the boom is sustained at this level into the new year.

To date the official statistics for enrolments and commencements only run as far as 30 September, but over the first nine months of the year both measures are tracking at well above double digit growth rates.

Growth rates have been tracking at above 10 per cent in all of the major states, but Chinese and Indian students seem to have been flocking to Victoria in particular, this great leap another factor contributing to Melbourne's record population growth in tandem with internal interstate migration.

The number of international student enrolments has been compounding at a growth rate of 7 per cent since 2001, with the fastest growth rates being experienced in New South Wales (7 per cent) and Victoria (9 per cent).

Since 2001 most of the great absolute increases in enrolment numbers have been seen at the major Universities in Melbourne, Sydney, and Brisbane. 

Source: Colliers

The wrap

Education is now close to being a $20 billion industry and is Australia's largest services export, and the third most valuable export overall, after iron ore and coal.

Huge ongoing growth as expected in the number of international students, mostly hailing from Asia.

Including domestic students, there are more than 1 million full time enrolments in Australia. 

Source: Colliers

Historically purpose built student accommodation (PBSA) for international students has been an immature sector, perhaps in part because the international students that can afford expensive tuition fees can equally afford to rent from private sector landlords.

Unlike in the UK, many domestic students opt to study in their home state, and as such have the choice to stay with friends or relatives. 

However, the huge growth in the number of international students should lead to more capital pouring into purpose built student digs. 

According to Colliers there are only around 63,000 metropolitan student bedrooms in total in the sector, with a further 8,000 under construction. 

Melbourne has fewer than 20,000 bedrooms in the PBSA sector, although the city does at least have a pipeline of supply under construction. 

Sydney also has fewer than 20,000 beds and the PBSA sector is struggling to compete with developers to secure expensive sites and make them work profitably, so the sector is forecast to remain badly undersupplied, according to Colliers research. 

In Brisbane, on the other hand, barriers to entry are lower, and there has been a greater numbers of developments under construction, mainly targeted at the premium end of the student accommodation market. 

Even accounting for those students staying with friends and relatives, given the relatively small amount of PBSA the student sector does have a significant role to play in the general residential rental market.

Here's how Knight Frank sees the existing undersupply by city, while also projecting a significant further increase in the undersupply in Sydney and Melbourne between now and 2020. 

Source: Knight Frank