Overseas student cap to hit accommodation sector: property developers

Property developers say the government’s decision to cap the number of international students entering Australia ‘makes no sense’.

Property developers say the cap on international student numbers will hit the student accommodation sector and the overall economy. Picture: Martin Ollman/NewsWire

Australia’s international students caps “make no sense” and will cut deep into the student accommodation market that has just only just recovered from the pandemic, a property developer says.

Cushman & Wakefield chief executive Noral Wild said the move was “obviously political” and would only hurt the economy.

“It’s our fourth largest export in this country and we bring in about $30bn from international students … it just makes no sense,” she told a property summit in Sydney on Tuesday.

“Obviously it’s political and I won’t get into that but I think it’s pretty shortsighted and messing with an export market like that is pretty dangerous.”

The effects of the pandemic and the abrupt departure of international students still linger in certain parts of the country including areas like Sydney’s Chinatown that experienced mass closures, with some restaurants unable to open again.

Ms Wild wasn’t alone in her views, with the majority of the panel, which included Dexus chief executive Ross Du Vernet, Barrenjoey chief economist Jo Masters and Blackstone Australia head of real estate Chris Tynan, all in agreement.

Cushman & Wakefield chief executive Noral Wild.

Dexus chief executive Ross Du Vernet.

Mr Du Vernet said the message the caps were sending was neither “constructive or positive”.

Barrenjoey’s Ms Masters said international students were “an incredibly important export and incredibly important for productivity”.

While the caps may be new, there had been a slowing of international student applications going on for several months, she said.

“If we look at the ratio of the number of student visa applications to approvals, normally the rejection rate, for want of a better term, is 12 per cent. It’s currently about 72 per cent,” she said.

“Even prior to these caps, we’ve been seeing this processing slow down in order to try to moderate the flow.”

Blackstone’s Mr Tynan shared a similar view. “It’s a hugely beneficial sector and it’s one which doesn’t involve digging something out of the ground,” he said.

Blackstone Australia head of real estate Chris Tynan.

“I don’t know why we are trying to moderate that sector politically … students are turning up with, you know, hundreds of thousands of dollars in their back pocket to spend in Australia … it seems shortsighted.”

Speaking after the panel was Robin Khuda, one of Australia’s most successful entrepreneurs, who arrived as an international student 26 years ago to study accounting at the University of Technology Sydney.

Last week he sold the data centre company he founded nine years ago for $24bn to US alternative asset firm Blackstone.

Mr Khuda did not comment on the government’s decision to cap the number of international students allowed to study in Australia. However, he said he believed both international students and skilled migrants would only benefit Australia.

“Look, I don’t want to get into political topics, but I think I’m a living example … that diversity is good,” he said.

“I think we should have an open mind about bringing students in and opening up our migration to people from different countries.”

It was obvious that Australia did not have enough people to build out some of the country’s large infrastructure ambitions and skilled migration and international students were a partial fix to that, Mr Khuda said.

AirTrunk founder and CEO Robin Khuda. Picture: Britta Campion

“I think Australia is a big country, you know, but we still have a relatively very small population,” he said.

“I’m a big believer of bringing more skilled labour into the country and bringing more students into the country.”

Mr Khuda said without more people there would be even more pressure on the economy and that would likely lead to further inflation.