Are International Students Causing Australia’s Rental Crisis?

Introduction

International students are often portrayed as contributing to Australia’s rental crisis, but a groundbreaking study conducted by the University of South Australia has challenged this perception. The research concluded that international student numbers have little to no impact on rising rental prices across most Australian cities. Instead, the study highlights deep-seated structural issues within the housing market as the primary drivers of the crisis.

In this article, we will explore the significance of these findings, their implications for international students, and the broader Australian housing landscape.

Significance of the Study: Shedding Light on Misconceptions

1. Debunking the Myth: International Students Are Not the Problem

The study analyzed data from 76 time points between 2017 and 2023 at a national level and 79 time points from 2017 to 2024 at the capital city level. The findings revealed a negligible relationship between international student numbers and increasing rental prices.

Key Finding:

• For every 10,000 additional international students, there was a corresponding $2 decrease in weekly rental costs at the national level.

This directly challenges the widely accepted narrative that blames international students for pushing rental prices up. The researchers highlighted that international students occupy a small segment of the rental market and often opt for student accommodations, further dispelling the myth that they are competing directly with local renters.

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2. International Students and Housing Choices: A Limited Role in Rental Demand

International students’ housing choices reveal a different story. According to previous research referenced in the study:

• Only 11-15% of international students in Sydney seek private rentals, with most relying on university housing websites.

• Interviews with students in South Australia showed that lack of recognized rental history and credit often limits their options, pushing them toward overpriced student accommodations or shared bedrooms.

These factors demonstrate that international students are not direct competitors in the private rental market, which alleviates pressure rather than exacerbating it.

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3. Impact of Misguided Policies on Housing and Education

The politicization of international student migration has led to stringent policies, including:

• Doubling of student visa fees.

• Tighter migration schemes.

• Proposals to cap international student admissions.

These policies could further strain the housing market by reducing revenue that funds university infrastructure, including student housing. Associate Professor Guanglun Michael Mu cautioned that these measures might backfire, worsening the rental crisis by diminishing the available housing options for both international and local students.

4. Rental Trends: Correlation Between Migration and Rising Rents

While some property research firms, such as CoreLogic and PropTrack, have correlated overseas migration with rising rents, this study presents a more nuanced understanding. CoreLogic’s analysis found that migration “hot spots” experienced higher rental increases, but the report did not isolate international students as the cause.

Additionally, a PropTrack report highlighted that rental affordability in Australia has dropped to its lowest level on record. However, attributing this solely to international students oversimplifies a complex issue tied to broader economic and supply challenges.

5. Economic Contributions of International Students: A Vital Revenue Source

International students contribute significantly to the Australian economy, providing billions of dollars in revenue to the education sector. Valentina Olivares, a former international student and current migrant worker, emphasized the substantial impact international students have on the economy.

“We make a massive contribution to revenue, and cutting this source through misguided policies could have dire consequences,” she noted.

With a record 201,490 people arriving in Australia on student visas in 2024—a 15% increase from the previous year—understanding their economic role is crucial in framing policy decisions that support, rather than hinder, Australia’s economic growth.

Key Takeaways

• International students are not the cause of Australia’s rental crisis, as demonstrated by the University of South Australia’s study.

• Their housing choices often involve student accommodations or shared living arrangements, making them non-competitors in the private rental market.

• Misguided policies aimed at restricting international student numbers could potentially worsen the housing crisis by limiting the supply of student accommodations.

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