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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Tony Gimple 09 Dec 2017

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

It's normal. If you plan to buy a house in one of the most beautiful spots in the country you should pay a high price.

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

I think that the situation will be the same at December.

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What has not been mentioned here is the effect of not only higher interest payments, but also that these payments are less likely to be offsettable as a business cost due to the scaling back of mortgage...

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Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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