As the academic year geared up, overseas students returned to Australia in droves during February.

The number of foreign students returning to Australia is on the rise, spelling good news for suburbs with high levels of student accommodation. Data from Core Logic shows that 140,000 foreign students returned to Australia in February, with NSW and Victoria leading the way.

During the height of the pandemic in 2021, areas with higher levels of student accommodation saw significant falls, with Melbourne CBD recording the highest drops. Rental levels in Melbourne fell by 23 percent and prices dropped by 7 percent during 2021, which had a flow-on effect to commercial property in the CBD and surrounds, such as retail properties that relied on that market. Data showed that prior to the pandemic, the numbers of foreign students rose steadily from just under 300,000 in 2006 to more than 800,000 in 2020 before falling to less than 100,000 during COVID.

However, figures show that 49,160 students arrived in NSW in February, with another 47,970 students heading to Victoria. Queensland was the next most popular destination, with 19,300 students arriving ahead of the start of the academic year, followed by Western Australia with 11,850.

Rents have already begun to rise quickly, reaching pre pandemic levels, although values had not kept a similar pace. That is expected to happen later this year, and we are hopeful it will spark a new construction cycle for further affordable student housing.