Chinese parents to save $360,000 from new student visa
A new report from Secret Agent claims states changes to the student visa rules saves Chinese parents $360,000 and could potentially reignite a property boom.
Secret Agent claim any rational Chinese parent will rethink whether studying locally or in Australia can provide a better education and quality of life for their kids. Here, the best primary school education costs half as much compared to China.
The report states according to Lianjia, a Chinese real estate website, it will cost on average RMB ¥9,588,378 or AUD$1,982,708 to buy a 110-130sqm 3 bedroom apartment in one of Beijing’s popular public primary school zones.
"Studying abroad, such as in Australia, has been a popular choice among wealthy parents in China. In a major city like Beijing, exam attendance has halved in the past decade, from 126,000 in 2006 to 61,000 today. At the same time, the number of students studying abroad has increased dramatically. Now, the Australian government has made studying in this country $360,000 more attractive," the report said.
"The first thing that Chinese parents want to do is to send their kids to a good primary school, and to do this they have to live in the right school zone, just like how it works here.
"Local students can study for free in these public primary schools. However, each intake is limited and parents must be able to afford the equivalent of a AUD$2 million apartment in the school zone. The other option is for parents to send their children to the more expensive private international schools, whose tuition fees on average cost AUD$43,648 (RMB¥211,080) per year in Beijing."
The report said The Victorian government, for example, charges about AUD$10,660 (RMB¥51,552) for international students to study in a public primary school.
"Melbourne’s private schools charge on average AUD $23,744 annually. Chinese parents will end up with a 50 percent savings by sending their kids to the best private primary schools in Melbourne instead of Beijing’s international schools," Secret Agent said.
"After comparing recent property sales in some of our top performing public primary school zones, it was found that it costs AUD$1,380,180 on average to buy a 656sqm house in Melbourne’s school zones, compared to AUD $1,982,708 (¥9,588,378) for an apartment in Beijing.
"So how does the total savings add up to $360,000? The cost of living in Australia would also have to be taken into consideration. The Department of Immigration and Border Protection has financial requirements that must be met in order to receive a student visa, which is a minimum spend of $18,610 per adult and $6,515 per child for each year they live in Australia.
"To calculate the total spendings for a Chinese parent and his or her child to reside and study in Australia, a 10% increase on tuition fees and 2.5% inflation on minimum living costs in Australia was assumed. The result is a staggering saving of AUD$359,788 if Chinese parents chose to send their children to Australia instead of Beijing for primary school studies.
"The majority of the savings comes from the difference in property price between Melbourne and Beijing’s school zones, and this also applies to other major cities in China. The Australian government’s intention for the new visa policy is to improve our economy by exporting our education to overseas students. In Secret Agent’s opinion, under the current FIRB rules, the price of properties in good school zones will continue to accelerate. We could also see prime inner city properties start to become acquisition targets. Many of these period homes have been "off limits" to the foreign purchaser. This may no longer be the case.
"If Chinese parents choose to send their children here for their studies, they will be considered as a temporary resident since they will remain in Australia for a continuous period of more than 12 months. Generally, temporary residents can purchase any residential real estate in Australia once they apply for and receive foreign investment approval. The downside is that they will have to sell the property within three months from when it ceases to be their principal place of residence. This makes off- the-plan townhouses the most attractive purchase to Chinese buyers, as they are cheaper and require less maintenance than big established houses. They can also be kept as an investment property once they leave Australia."
For more information from Secret Agent, click here.
