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Are international students really to blame for soaring rents?


Instead of developing more effective housing policies to manage the nation’s ongoing housing crisis, the federal government has developed a new, slightly troubling, narrative around the shortage of rental homes and soaring rents: international students are to blame. This populist narrative, promoted by some politicians, raises the question of whether the federal government using international students as scapegoats for broader housing policy failures.

The Labor government’s plans for managing overseas student numbers seem to be heavily influenced by the belief that these students are at least partly responsible for hikes in rents, housing shortages, and pressure on infrastructure.

This belief – and the government’s corresponding plans to deal with ‘unmanaged growth in international education’ – is outlined in the draft paper, ‘International Education and Skills Strategic Framework,’ released last month. According to the paper, the growth in international student numbers has ‘compounded infrastructure pressures with insufficient purpose-built student accommodation for international students.’

The government is also concerned that the ‘unmanaged growth’ is threatening the integrity of Australia’s international student sector and wants to wipe out dodgy providers who enrol students who aren’t intending to study. Some of these concerns, while justifiable, have already been dealt with.

As part of the Migration Strategy introduced in March this year, the English language requirement for a student visa was raised and the Minister for Home Affairs, Clare O’Neil, announced the government would suspend high-risk providers from recruiting international students. In October last year, the government also announced new savings requirements for obtaining international student visas. The savings students need to study in Australia increased by 17 per cent to $24,505, with a further increase to $29,710, which occurred last month.

While it is commendable that the government wants to stamp out dodgy operators who supply vocational education in Australia, the reality is that the government’s other major aim is to reduce pressure on the rental market by capping international student numbers. To do this, the government will set limits – as outlined in the paper and in the federal budget – on enrolments at a provider level, including within specific courses or locations. This will apply both to higher education and VET.

The government has now introduced legislation giving Jason Clare, the education minister, and Brendan O’Connor, the skills minister, largely unprecedented powers to cap the number of international students. They will also have the power to control which universities and vocational institutions international students should attend and which courses they enrol in. Clare introduced legislation last month to cap enrolments and the limits should start with new enrolments next year.

This is a radical change from what international students have been used to when choosing universities and degrees. Currently, international students decide where they enrol and what they enrol in. Many international students make a beeline to study information technology, and management and commerce. Latest government figures from 2022 show there were 171,251 international students studying business degrees but only 14,194 in education, one of the least popular areas for international students to enrol in. The government is keen to funnel international students into courses such as teaching and nursing where there are skill shortages.


'For decades successive governments have progressively relinquished much of their responsibility for providing public housing and housing that is affordable. Policies have also made it easier for people to gamble on housing stock making some people very wealthy. So when the nation finds itself in a housing crisis like it is presently, there is vastly inadequate public and social housing to fill the void.' 


International students are also keen on studying at Australia’s higher-ranked universities. Latest government figures show that Monash University has 19,290 onshore international students, Melbourne University has 17,316, Sydney University 16,912 and Queensland University has 16,373 onshore international students.

Regional universities get far fewer international students. Figures show that the University of New England in NSW has 800 onshore international students and Charles Sturt University also in regional NSW has 1020 students.

It’s inaccurate, therefore, to say that caps on international students and designating where they study and what courses they enrol in will ease pressure on the rental and housing markets. Recent research attests to this.

The Property Council of Australia’s study on student accommodation released in April shows that international students only make up 4 per cent of the rental market and that they do not compete with families in the suburbs for houses. Instead, international students are concentrated near universities such as Melbourne and Sydney and live in apartments largely designed for students and other types of student accommodation such as university colleges.

The report, ‘Myth Busting International Students’ Role in the Rental Crisis’, also indicates that more student arrivals do not coincide with rental price increases. More students arrived in 2019 than in 2023 yet rents have increased over same the period, according to the report. The report suggests that many reasons – such as the rise of single-person households – cause rental hikes and pressure on people finding accommodation.

‘To lay the blame for Australia’s overheated rental market at the feet of students, who underpin our university sector and fill skills gaps within our cities, is at the very least unfair, and at the most highly damaging to our reputation as a welcoming country,’ the report says.

Last month the Group of Eight, which represents Australia’s research-intensive universities, produced an economic analysis that showed there is no direct link between international student numbers and the current housing crisis.

The paper, ‘International Students and Housing and Other Cost of Living Pressures’ reveals that housing affordability is fundamentally a supply side problem, rather than attributable to international student numbers.

‘It is overstated to blame Australia’s national housing crisis on international student arrivals, particularly when stronger demand has not been met by supply,’ the paper says. New housing supply falling short of increased demand is a key driver. 

Figures in the paper show that from the peak of March 2021, the monthly number of houses approved for construction has fallen by about 46 per cent. The paper also suggests that international students are struggling to pay their rent because they are being priced out of the market.

Even after international students complete their degrees, only a moderate number gain permanent visas, according to data in a recent Grattan Institute report, ‘Graduates in Limbo: International Student Visas Pathways After Graduation.

In the late 2000s, according to the report, up to 25 per cent of student visa-holders transitioned to a permanent visa within six years of beginning their courses study. For more recent international students, that figure has halved to just 12 per cent.

For decades successive governments have progressively relinquished much of their responsibility for providing public housing and housing that is affordable. Policies have also made it easier for people to gamble on housing stock making some people very wealthy. So when the nation finds itself in a housing crisis like it is presently, there is vastly inadequate public and social housing to fill the void. 

Catriona Jackson, Universities Australia Chief Executive, made a statement last December as to why it is not right to target international students for the housing crisis. ‘It is unfair to place the blame squarely at their feet because the housing crisis is not a new issue. Housing has been the Achilles’ heel of successive governments for decades. Policies have lagged our growing population for a long time. International students are not the cause.’




Dr Erica Cervini is a freelance journalist and sessional academic.

Main image: (Getty images)

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