Can we blame the housing crisis on international students?

Can we really blame the housing crisis to international students?

The answer is no according to a report released by the Student Accommodation Council which suggests that international students are not the culprits behind Australia's housing crisis.

Representing merely four per cent of the rental market, their impact is minimal compared to other, more significant factors.

So what has caused the housing crisis?

According to the report, the true drivers of rental shortages and soaring costs are varied and include the rise of smaller households, increased intrastate migration, and the recent trend of converting second bedrooms into home offices.

Interestingly, even as international students have returned to Australia post-COVID, the surge in rental prices began earlier, in 2020, a period marked by a decrease in international student numbers as many returned to their home countries.

From 2019 to 2023, the median weekly rent escalated by 30%, while student visa arrivals plummeted by 13%.

This mismatch highlights deeper, structural issues within Australia's housing market rather than the presence of international students.

Torie Brown, Executive Director of the Student Accommodation Council, emphasises,

"International students have been unfairly blamed for the rental crisis.

This report clearly shows that long-term structural issues are the real drivers of rental pressures."

The current pipeline of new purpose-built student accommodation (PBSA) developments is concerning.

With only 7,770 new beds expected by 2026, there is a dire need to expand capacity to prevent further spillover into the private rental market.

Brown argues for a significant increase in PBSA projects to add 66,000 new beds by 2026 to better support international students and maintain their proportion within dedicated student housing facilities.

Anouk Darling, Chair of the Student Accommodation Council and CEO of Scape, also points out the challenges in expanding PBSA infrastructure, including slow planning processes, high property taxes, and cumbersome state-based legislation.

Despite these hurdles, the will to enhance and expedite the development of new student accommodations exists.

Darling further states:

"International students contribute $25.5 billion to the Australian economy.

They deserve quality housing that reflects their value to our community.

It’s crucial for government collaboration to expand the supply of professionally managed, custom-built, and safe student accommodations, which will, in turn, alleviate the pressure on the private rental market."

About Brett Warren Brett Warren is National Director of Metropole Properties and uses his two decades of property investment experience to advise clients how to grow, protect and pass on their wealth through strategic property advice.