Could China crisis cause a student flat crash?

Could China crisis cause a student flat crash?

Economic turmoil in China could have huge implications for the explosion in student accommodation in North East cities according to one property expert.

Chinese economic output economy fell by 5.5% in 2015 to its slowest rate of growth since 1991 - causing a 23% slump in the value of its stock market and leading India to overtake it as the world’s fastest growing economy.
 
North East-based property expert Ajay Jagota of sales and lettings firm KIS believes this slowdown may lead to a decline in overseas students coming to the region – with huge implications for newly-constructed student accommodation.

Five student blocks opened in the centre of Newcastle in 2015, with a further six currently under construction. One in seventeen homes in the city centre are now occupied by students with 11,000 new students homes created since 2008.

A planned 445-bed student accommodation in the centre of Durham has recently caused controversy by closing the acclaimed restaurant Oldfields, while further plans to convert the nearby County Hospital site into a 363-bed student development were  rejected by planners.


Ajay Jagota, founder and Managing Director of KIS, said: “Students contribute a huge amount to our local economy, and student flats can actually be very good news for permanent residents, reducing pressure on the housing stock in areas popular with students and young professionals and lowering both house prices and rents.

But there are now tens of thousands of student bedrooms in our city centres which are relying on overseas students for their financial sustainability – and that sustainability could come under huge pressure if there is economic turmoil in the countries those students are coming from.

If the Year of the Monkey is one where the Chinese economy starts to suffer, sending offspring overseas for education is likely to be one of the areas families are going to economise on first. That could mean huge numbers of empty bedrooms and it’s easy to envisage empty buildings following that.

It might even sound glib, but even the end of China’s one child policy could have an impact, with families having less money to spend on individual children.

Assuming the figures are accurate other countries – Britain included – would kill for growth as disappointing as China’s  but in a globalised economy economic shocks on the on the other side of the world can have a huge and unforeseeable impact here, even on something as localised as the housing market”.

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AbbieP.
AbbieP. 22 Jul 2016

"While house prices in the most expensive eleven boroughs have declined values in the cheapest eleven boroughs continue to rise" - not a nice way to even out the price range. London is overrated as it

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AbbieP.
AbbieP. 21 Jul 2016

And try to profit from your decisions, I may add

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CommercialTrust
CommercialTrust 19 Jul 2016

Retirement investment has always been one of the biggest draws of buy to let. And the buy-to-let demographic is, on balance, older. (Over a third of our applicants are over 50 at the time of application.) It...

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Forrest Wheatey
Forrest Wheatey 11 Jul 2016

I find the time perfect for ever home-owner wannabe. Prices should slowly, but steadily drop, at least for the inner buyer. Making it harder for outsiders to buy properties (the whole Brexit thing means...

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property guru
property guru 11 Jul 2016

Why should Ajay even have to be looking for it. It should be public knowledge. Why is not just publish each years and to were it is and be AUDITED. Accountability.

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property guru
property guru 11 Jul 2016

Surprise suprise

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CommercialTrust
CommercialTrust 30 Jun 2016

This is great news for buyers and investors in a period of significant uncertainty. The 10-year buy-to-let fix at 3.99% in particular is excellent, a clear 100 bps ahead of the nearest competition. Though...

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Lee
Lee 30 Jun 2016

Let's see what happens to north-east property prices when Nissan announce they're leaving.

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DmitriKara
DmitriKara 29 Jun 2016

I just read another article about eviction rising and this was exactly what was on my mind, Housing has become "cat and mouse"...

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DmitriKara
DmitriKara 29 Jun 2016

I am really not surprised. I've seen one too many impudent tenants and in my humble opinion renters have one too many privileges and options to abuse heir landlord in so many ways...

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DmitriKara
DmitriKara 29 Jun 2016

There is still so much uncertainty and I will surely step back and see what's happening before I could make any decisions on my end.

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ChristinaReedUK
ChristinaReedUK 20 Jun 2016

I don't understand why it's always a war between the two sides. Either, way the landlord is probably keeping a detailed inventory and will see the changes you've made. I just don't understand why there...

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