International student Livi Sduon was not feeling optimistic as she joined about a dozen other prospective tenants at a midweek rental inspection in inner-city Sydney.
Although she planned to split the rent with a flatmate, the two-bedroom unit in Ultimo was way out of her price range.
"For two bedrooms and one bathroom [this apartment] is $1,000 per week," Ms Sduon said.
"That's so expensive."
Ms Sduon has toured several properties near her university in Camperdown, but acknowledges the chances of finding a suitable place before the start of the semester are slim.
"It's difficult [to find a rental] at this time, also because so many international students will be back in Australia," she said.
More than 40,000 Chinese students are expected to return to Australia for face-to-face classes after China announced a snap ban on online learning at foreign universities a fortnight ago.
The abrupt decision came only weeks before the start of semester one, with many students left scrambling to return to Australia.
Although China has since announced it will allow some students to apply for exemptions, universities are still expecting the majority of affected students to return much earlier than anticipated.
With student accommodation at capacity in many cities, they will be competing with other renters in an already tight rental market.
Sydney real estate agent Alison Chang said demand from international students had soared after China imposed the online learning ban.
"We've seen a lot of people applying for the property before the open house has actually started," she said.
"[Students] have been looking for agents to view the properties on their behalf, just because they're not physically here in Australia yet.
"They're not just looking at the suburbs near the universities … they are expanding out."
Ms Chang said she had received more than 50 inquiries about the Ultimo apartment within two days of listing the property.
"Someone offered to pay six months' rent in advance to get approved," she said.
Australia's rental vacancy rate dropped to 1.3 per cent in January, compared to 2 per cent the same time last year, according to CoreLogic figures.
National rents surged by a record high 10.2 per cent last year, reaching $555 per week.
Eliza Owen, CoreLogic's head of research, said the influx in overseas students would add to rental pressures, which could see prices jump even further.
"When you've got an already tight level of supply and ongoing demand, then prices can only go one way," she said.
"It's really something that in terms of the housing supply, we're not very well positioned to cope with."
Tim Lawless, CoreLogic's research director, said areas near universities and public transport would bear the brunt of the accommodation squeeze.
"This higher-than-expected lift in foreign students will flow directly and immediately into rental demand, especially around inner-city markets in Melbourne and Sydney," he said.
"Rental conditions remain very tight in these very popular higher-density markets … that's set to get even worse as we see the bounce back in migration."
A report released by the Student Accommodation Council last year found many capital cities were already at capacity for purpose-built student accommodation beds.
The report found Brisbane, Perth and Adelaide were expecting vacancy rates of zero in 2023.
The Council's executive director Torie Brown said while the return of international students was "great news" for providers who were hit hard during the COVID pandemic, more accommodation was needed.
"What we're now running into is a supply issue because we don't have enough new buildings coming online over the next two years," she said.
Advocates are concerned the rental crisis could leave foreign students open to exploitation.
Joy Xu from the UTS Students' Association said some students in China were paying hundreds of dollars for private rental inspection services being offered by individuals on Chinese social media.
She said students paid the money in exchange for the person to take photos and videos of rentals.
"There is an emerging underground market for this … these people are not professionals like [real estate] agents, they are just a random person online," she said.
"I'm concerned that this might increase the chance of fraud and scams.
"International students lack a local support network. They lack awareness about their legal rights and rental rights."
Universities Australia said it was working with the federal government to "facilitate the safe return" of foreign students.
"Universities are continuing to support students by providing information on accommodation options before they arrive in Australia," Universities Australia chief executive Catriona Jackson said.
"We encourage any student struggling to secure housing or facing financial pressures to reach out to their university for assistance."
Chief executive of the Group of Eight universities Vicki Thompson said letters of support were being offered to any students seeking exemptions from the ban.
She said some institutions had pre-booked student accommodation rooms, but acknowledged it would not be enough to meet demand.
"We want our students back on shore and in campuses, but at such short notice and with the timing of our semesters, that makes it really difficult," she said.
"The priority is we want our students back and when they come back we want them to have somewhere to actually lay their head each night."
