The coronavirus pandemic and geopolitical tensions are roiling the real estate market's student housing sector globally this year but market players say Australia could emerge relatively unscathed or even gain ground at the expense of more mature markets in the U.S. and the U.K.
One investment consultant, who declined to be named, said he's cautious for now about ruling out more negative scenarios for the industry. For example, people are hoping that the political rift that has opened up over the past year or more between China and the U.S., or China and Australia, won't impede the all-important flow of Chinese students to those markets. But that's by no means assured, he said.
But other market players predict Australia's student accommodation sector is poised to emerge from the current set of challenges facing the industry with greater momentum than more established markets in the U.S. and the U.K.
"There's no historic evidence that Chinese students will boycott studying in Australia" as a result of a recent flare-up in tensions, Danny Phuan, head of acquisitions Asia-Pacific with Allianz Real Estate, noted. Australia could "gain more popularity as a top-rated international education hot spot" amid steps by the U.S. and the U.K. that are making Chinese students feel "markedly less welcome," he said.
And with the purpose-built student accommodation penetration ratio in Australia in the "low teens, relative to 30%-40% in the U.S. and U.K.," Australia's market has "pronounced potential ... to catch up going forward," Mr. Phuan said.
Stephen Gaitanos, Sydney-based managing director and group CEO at Scape Australia — Australia's largest student accommodation provider — said whether the focus is on geopolitical tensions or success in containing the coronavirus pandemic, Australia now is better positioned than the U.S. and the U.K. to turn the corner and capture market share in the global student accommodation sector.
There will be some "hiccups and hurdles" in 2020, but given "the appropriate way our government has dealt with COVID" and Australia's mutually beneficial relationship with China, the country is in a strong position relative to the U.S. and the U.K., where China is "having a much bigger fight," he said.