Students

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<p> It's been suggested that trends in migration from Australia towards Australia might bode ill for our economy, a kind of pseudo-recession indicator if you will.</p>
<p>Certainly, there had been a significant increase in those migrating permanently of for the long term across the Tasman - many of whom were originally Kiwis returning home.</p>
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<br><div>It's not too hard to see why these trends developed.</div>
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<div>New Zealand had been running a much higher unemployment rate than Australia while we were still enjoying the spoils of a heady resources construction boom.</div>
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<div>But then as the mining construction boom passed its peak in Australia, opportunities for employment here declined, and the unemployment rate ticked higher - just as NZ was being anointed with its "rock star economy" status.</div>
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<div>Unfortunately New Zealand's one-time rock star economy rather seems to have rocked itself out.<br><br>In fact, NZ now has a higher unemployment rate than Australia, after an odd-looking blip last in the quarter before last.</div>
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<div>Now there isn't all that much to pick between either economy.<br><br>Both have indicators of under-employment, under-utilisation and weakened commodity prices (here it's mainly bulk commodities, over there, dairy).<br><br>And both countries are looking to tourism and international student migration to paper over the cracks.</div>
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<div>It looks as though the trend in net migration having tilted sharply in favour of New Zealand has now reached something approaching equilibrium. </div>
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<div>In fact in April there was a small seasonally adjusted net flow back in favour Australia. </div>
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<br><div>In truth, whether 100 or so people decide to head this way or that will have little bearing on the health or otherwise of Australia's economy going forward.</div>
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<div>About 60 per cent of permanent migrants to Australia now hail from Asia.</div>
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<div>And with our international student visa rules to be relaxed significantly from 1 July this trend will be reinforced, with a high share of the new applicants expected to be from China and India.</div>
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<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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About 60 percent of permanent migrants to Australia now hail from Asia: Pete Wargent

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<div>I recently visited the wildlife sanctuary at Currumbin, and it occurred to me that without the scores of Chinese visitors in attendance on the day, the place would have been four-fifths empty!</div>
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<div>As it was the attraction was absolutely packed to the rafters with camera-toting tourists. </div>
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<div>It's a trend that is being reflected right across Australia, with the number of visitors from China, Taiwan and Hong Kong continuing to multiply at a record pace.<br><br>That's just one part of the Asian century story for Australasia.<br><br>Meanwhile, a recently released report on global migration of the super-wealthy found that the two most popular cities in the world for net inflow of millionaires in 2015 were Sydney (4,000) and Melbourne (3,000). Australia is becoming a playground for wealthy Asians.<br><br>As noted in these pages many months ago, though, perhaps the most significant change for Australia will be the record boom in international students, since this will in turn lead to higher permanent residency uptake.<br><br>The government has announced that from 1 July 2016 - just a few weeks away - that there will be a series of important changes to the student visa programme.<br><br>There will now only be one visa class only for international students, subclass 500, and under the new streamlined process three quarters of applications will be waved through in less than one month.<br><br>International students with the requisite funds or income and English language skills will be able to apply for the new visa, including Primary School student applicants (from the age 6 or above) and their guardians or family members.<br><br>This represents a very significant shift in policy.<br><br>The rules have also been relaxed with regards to course duration and immigration risk assessment.<br><br>As a result of the new changes, there could potentially be a huge increase in the number of Primary School age Chinese students and their guardians, with many ultimately going on to become Australian citizens.<br><br>With a combined population of about 2.7 billion or so, there is boundless potential for uptake from China and India in particular.</div>
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<div><strong><span style="text-decoration: underline;">Immigration eases</span></strong></div>
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<div>The latest ABS Overseas Arrivals and Departures figures to April 2016 rolling annual number of net permanent and long arrivals eased to +270,200, the lowest number since May 2007. </div>
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<br><div>The impact of this will mainly be felt in regional Australia and in resources regions, with population growth in the largest cities continuing to expand at around 80,000 to 90,000 per annum. </div>
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<div>Some 59 percent of permanent settlers hailed from Asia in the year to April, with the volumes arriving from New Zealand and Britain having slowed markedly.</div>
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<img src="/images/2016/06/07/A3.jpg" alt=""><br><br><div><strong><span style="text-decoration: underline;">Rebalancing continues</span></strong></div>
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<div>The lower dollar continues to drive tourist and other short term arrivals to record highs, with the 7.69 million short term arrivals over the past year being a punchy 9 per cent increase from April 2015.</div>
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<img src="/images/2016/06/07/A4.jpg" alt=""><br><br><div>Most notably, the number of visitors from China, Taiwan and Hong Kong continues to multiply at an extraordinary rate, up by a tub-thumping 21.2 per cent over the year to 1.49 million. The compounding effect of such a growth rate implies a doubling of that number within 3.5 years. Incredible stuff.</div>
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<br><div>Most short term arrivals come for holidays (3.79 million), but more than 2 million now cite their main reason for travel as being visiting friends and family, thereby reinforcing the Asian connections.<br><br>
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<br><div>After a rare blip last month, the number of education arrivals is now on the march again, with the 489,900 arrivals over the past year representing a romping increase of 17 per cent.<br><br>And thanks to the streamlining of visa rules from 1 July 2016 the number of international students will likely begin to flow freely more or less in perpetuity.</div>
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<br><img src="/images/2016/06/07/A2-1.jpg" alt=""><br><span>This is another trend which is largely driven by China and India, and it </span><span>is also heavily</span><span> focussed up</span><span>on the largest capital cities. </span><br><div> </div>
<div><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
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<div>The significance of the unprecedented boom in Chinese tourism and students seems largely to be lost in the popular narrative, which continues to discuss economic malaise when the economy is growing at a faster pace than even the most bullish of commentators expected (an annualised pace of 3.6 per cent in the last six months reported).</div>
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<br>It is true that net exports are leading growth, and certainly there has been concentration risk aplenty, but the international trade data confirmed that the pace of education, tourism and other services exports to China and other parts of Asia is accelerating.</div>
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<br>No doubt there will be the usual shrill complaints from the anti-immigration lobby about the streamlining of entry rules for international students, but overall this should be be a material boost for the Australian economy - and indeed for the beleaguered new apartment market. <br><br>
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<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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New student visa rules set to boost property markets: Pete Wargent

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<div>The Department of Home Affairs released its latest pivot tables on temporary visas holders in Australia (with thanks to Henry Sherrell for highlighting). </div>
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<div>While the December quarter numbers tend to swing sharply higher due to fireworks on the harbour and all that jazz - to well above 2.2 million last year - the September figures make for interesting reading. </div>
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<div>The stock data shows that temporary visa holders in Australia rose to 2.07 million by September 2017, well up from 1.96 million a year earlier and some 23 per cent higher than as at September 2012. </div>
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<div>That represents an extra 382,000 temporary visa holders in Australia from 5 years ago. </div>
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<div>There's no doubting the source of the boom, being the 50 per cent boost in student visas over the past half decade to well over ½ million. </div>
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<div>Click here <a href="https://2.bp.blogspot.com/-SWsd7w8yNy4/Wrmq7fiXsKI/AAAAAAAApH0/Fj9Q0NmYo1UUSiUELINFooJFiPxQBx3BQCLcBGAs/s640/Visas.jpg" target="_blank">to enlarge.</a>
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<div>Also of interest to note: the number of bridging visas is now rising fast, implying a surge in the demand for permanent residency (PR) visa places from temporary visa holders.  </div>
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<div>These trends help to explain why the population of the largest capital cities has effectively been growing much more quickly than implied by the issuance of PR visas alone. </div>
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Student visa boom still underway: Pete Wargent

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<p>GUEST OBSERVER</p>
<p>Most recent estimates show the Higher Education Loan Program (HELP) debt owing is nearly A$52 billion in 2017-18. It’s forecast to increase to A$75 billion by 2020-21 and up to 25% of those loans are unlikely to be paid.</p>
<p>Legislation to lower the initial HELP repayment threshold from A$55,000 to A$45,000 (with a rate of 1%) is likely to pass the senate after passing the lower house on March 27th. This legislation includes linking indexing to inflation instead of average weekly earnings, which will slightly increase the rate of debt accumulated (20 year average for inflation is around 2.6%, compared to 1.8% for average weekly earnings).</p>
<p>Increasing repayments on HELP debt by lowering the initial threshold is an easy target. Why? Because people who owe money don’t pay much attention to their HELP balances, let alone the parameters that determine repayment and accumulation.</p>
<p>Since the ATO stopped posting statements in 2013, people owing HELP debt are left to their own devices and to check their balances on the ATO site. General financial advice points to giving HELP debts low levels of attention and paying down high-interest loans first.</p>
<p>Proposed changes, like replacing the annual average weekly earnings indexation with the 10-year government bond rate, abolishing the deceased-estate write-off for estates exceeding A$100,000, and lowering the initial threshold to A$42,000 have drawn media attention over the years, but have not been met with outrage by those potentially most affected.</p>
<p>But there are softer tactics that could nudge debtors into increasingly making repayments voluntarily.</p>
<p><strong>Students need a financial toolkit</strong></p>
<p>First, equip students with a financial toolkit. It would involve legislating education providers to deliver financial literacy programs that include information about the HELP scheme and their obligation.</p>
<p>Such a program should include making students aware of the parameters, repayment projections under various scenarios, and potential changes to the scheme as proposed by political parties or commentators. If the provider (university or vocational educator) offers HELP then surely they have a moral obligation to provide this service.</p>
<p>Offering financial literacy programs through tertiary education providers also fills a gap in the National Financial Literacy Strategy. ASIC’s MoneySmart would be an ideal curriculum consultant.</p>
<p>Such programs are already implemented in the US. Due to the large scale of privatised student debt issues, 53% of universities offer financial education program to students.</p>
<p>Studies on the efficacy of these programs demonstrate increased financial knowledge, reductions in financial at-risk behaviours (like delinquencies, excessive credit and over-spending), and increases in responsible behaviours (including improving regular savings and planning).</p>
<p>While the settings in the US differ to Australia (commercial interest rates, not extinguished by death), privatisation has been previously explored.</p>
<p><span style="font-size: 12.16px;">Australian debtors don’t “default” like US debtors because most student loans are like a commercial loan in the US. In Australia, graduates only do not pay if they don’t reach the repayment threshold, or die.</span></p>
<p><strong>Bring back discounts</strong></p>
<p>Second, bring back discounts on voluntary payments over A$500, abolished by the Liberal government in 2017 . Previously, discounts were 15% up until 2005, then 10% until 2014, then 5%. What, then, incentivises people to pay lump sums?</p>
<p><strong>Communication is everything</strong></p>
<p>Third, the ATO needs to communicate with HELP debtors on a regular basis to overcome laziness and put HELP debts as first priority in personal financial decisions.</p>
<p>Text messaging is effective in influencing behaviour. Text messages prior to indexation have encouraged balance checks and lump sum payments (particularly at tax rebate time) and may be effective in increasing voluntary repayments. These strategies work by subtly reframing the way messages are conveyed, and regular presentation of messages, to positively impact behaviour.</p>
<p>A positive aspect of the legislation under consideration is that lowering the initial repayment threshold means HELP debt repayments will appear on payslips. Because of this, early on in a debtor’s working life they will be able to increase their awareness of HELP debt owing.</p>
<p>The threshold reduction needs to be compatible with the original intention of the income contingent loan scheme to provide equitable access. Lowering the initial repayment threshold will put increased financial pressure on relatively low paid workers, many of whom are women. Under the new changes, a person earning A$46,000 will repay nearly A$9 a week. While this doesn’t sound like much, a single mother may strongly disagree.</p>
<p><img src="https://counter.theconversation.com/content/94910/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">The government should consider pursuing other, more gentle and effective behavioural tactics to reduce the national HECS debt in the lead-up to the budget, rather than one that has the potential to hurt low paid workers.</p>
<p><em><strong>Tracey West</strong>, Lecturer in Behavioural Finance, Griffith University</em></p>
<p><em>This article was originally published on <a href="http://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/lowering-the-help-repayment-threshold-is-an-easy-target-but-not-the-one-we-should-aim-for-94910" target="_blank">original article</a>.</em></p>
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Lowering the HELP repayment threshold is an easy target, but not the one we should aim for: Tracey West

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<p>With the Australian and New Zealand student accommodation markets set to benefit from the fastest growing foreign populations in the world, Savills has hired two experienced executives to look after its student business in these two countries.</p>
<p>Conal Newland is joining Savills from JLL where he was the national head of Student Accommodation. Newland has spent more than 10 years in the sector, in both Australia and the UK, and has been involved in several large-scale projects in the sector, including the University of Exeter (3,000 beds) and the University of Hertfordshire (2,500 beds).</p>
<p>Joining Newland is Rachel Coates, also from JLL, who has Student Accommodation advisory experience in both Australia and the UK. Together, they have more than 14 years combined sector-specific experience.</p>
<p>Based in Sydney, Newland will head the expansion of the student accommodation business alongside Coates. Both will be focusing on growing this platform in Australia and New Zealand.</p>
<p>“The student accommodation sector is a growing investment class welcomed by both local and international investors and with Conal and Rachel now on board, we can now be at the forefront of this growing platform," said Paul Craig, Savills CEO Australia &amp; New Zealand.</p>
<p>Newland said more than $2 billion were invested in 2015 into development projects in the region.</p>
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Savills hires two senior executives for student accommodation business in Australia and Zealand

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<p>Brisbane CBD’s latest purpose-built student accommodation, Iglu Brisbane City, has opened its doors after a three-month delay for occupancy approval clearances, with more than 250 students moving in.</p>
<p>Located at 65 Mary Street, Iglu Brisbane City includes 414 beds in air-conditioned studio and multi-share configurations. It has communal areas including a gym, games areas, cinema room, and an outdoor entertainment area.</p>
<p>The Queensland government had initially denied occupancy approval while it investigated the building’s external aluminium panels. </p>
<p>The Queensland Fire and Emergency Service had raised concerns the cladding presented a fire risk and would put the building's occupants in danger, said an article in brisbanetimes.com.au.</p>
<p>During this time, Iglu paid for alternative accommodation for the students, a media release said.</p>
<p>Following the government confirmation, Iglu director Jonathan Gliksten said he was excited to welcome residents to the building.</p>
<p>“Iglu Brisbane City boosts Brisbane’s appeal as an ideal student living destination for local, regional and international students,” he said. "Our accommodation is close to universities, transport and shopping, and is staffed around the clock." </p>
<p>“We have always known that our building complied with National Construction Code and are absolutely confident in the quality and safety standard of the building materials used,” Gliksten said.</p>
<p>“We understand that the Queensland government needs to ensure the safety of buildings, but we were disappointed with the length of time the process took."</p>
<p>The project is the fourth student accommodation facility under the Iglu brand with another in Kelvin Grove, and two in Sydney. Two additional properties are currently under development in Redfern (Sydney) and Melbourne CBD.</p>
<p>Iglu Brisbane City's accommodation options include share apartments, studios or one bedroom apartments, with early bird rates still available for Semester 2, 2016.</p>
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Iglu's Brisbane student tower opens after 3-month delay for safety checks

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<p><span>Leading global investment firm Goldman Sachs has teamed up with Blue Sky Private Real Estate to launch a joint $1 billion student accommodation.</span></p>
<p><span>The two companies are aiming to build a portfolio of between 5,000 and 10,000 student </span>accommodation beds across Australia and New Zealand over the next few years.</p>
<p>Blue Sky Private Real Estate have already grown the student accommodation development pipeline to more than 3,000 beds across the country since the formulated the investment strategy in 2014.</p>
<p>In a sector which has been heavily undersupplied in relation the the US and UK, head of investing for Blue Sky Private Real Estate Adam Vaggelas said the partnership was a key milestone in the company's strategy.</p>
<p>“Education is Australia’s largest non-resource export industry, worth in excess of $18 billion per annum and growing," he said.</p>
<p>"The ability to scale further into this domestic thematic, in part due to region’s proximity to a rapidly expanding Asian middle class, is a key focus for the partnership."</p>
<p><span>The Blue Sky partnership is Goldman Sachs’ entry into the Australian student market, however the global investment firm has been active in the European student market for a number of years.</span></p>
<p>Earlier this year Goldman Sachs announced a £2 billion joint venture to form the Vero Group consisting of approximately 600 staff managing almost 25,000 student beds across the UK.<br><br>Entities owned by Goldman Sachs and funds managed by Blue Sky will each own 50 per cent of future projects developed under the Australian joint venture. <br><br><br><br><br><br><br><span><br></span></p>
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