International Students Aren’t the Culprit in Australia’s Housing Crisis – Here’s What Really Matters

Why are we blaming international students for Australia’s housing crisis?

In recent years, as housing affordability has worsened across Australia, international students have been thrust into the spotlight as a scapegoat.

It’s an argument that’s tempting in its simplicity: more students mean more demand, which pushes up rents.

But the reality?

It’s a lot more nuanced, and the data paints a very different picture.

The facts about international students and housing

According to the Student Accommodation Council (SAC), international students account for only 6% of the rental market.

Source: PropTrack

Their impact on housing is heavily concentrated in inner-city areas, where most student accommodation is located.

A staggering 73% of local government areas (LGAs) have an international student population of less than 1%.

In other words, for the vast majority of Australian communities, international students aren’t even on the radar when it comes to housing pressures.

And here’s the kicker: during the height of the pandemic, when international student arrivals plummeted by 13%, rents didn’t drop.

In fact, they skyrocketed by 30% from December 2019 to December 2023.

This alone dismantles the argument that student numbers are driving rental hikes.

Purpose-Built Student Accommodation (PBSA) to the rescue

A key reason international students aren’t placing significant pressure on the broader rental market is the rise of purpose-built student accommodation (PBSA).

These professionally managed facilities have grown in tandem with student numbers, providing safe, reliable, and all-inclusive housing.

Around 30% of these spaces are occupied by domestic students, especially those moving from regional areas to study.

PBSA doesn’t just house students; it actively relieves pressure on the rental market by taking them out of competition with families for private rentals.

For many students, it’s a game-changer, offering amenities, fixed costs, and 24/7 support, making it far more appealing than shared housing.

Why capping student visas won’t solve the problem

Some have called for tighter visa caps on international students to alleviate housing pressures.

However, research by SAC reveals such measures would barely make a dent.

For instance, limiting student visas to 270,000 annually would reduce their share of the rental market by less than 1%.

The impact on average metropolitan rents? A negligible 0.8%, or about $5 per week.

Moreover, such reductions wouldn’t even touch areas popular with families and retirees, where the housing crisis is most pronounced.

This highlights that the issue lies elsewhere – not with international students, but with deeper structural failings in our housing market.

The real causes of the rental crisis

Karen Dellow, Senior Data Analyst at Proptrack highlighted that the rental crisis stems from a shortage of available properties.

And driven by multiple factors such as:

1. Insufficient new builds to meet demand, with current constructions taking 50% longer than four years ago due to approval delays, a lack of skilled workers, and increased building material costs.
2. Investors exiting the rental market due to low demand for inner-city rentals during the pandemic and increased land taxes in Melbourne.
3. Population growth, including natural increases and migration, raises demand. An aging population also means people need housing for longer.
4. Increased single-person households reduce availability.
5. Cost-of-living crisis, higher interest rates, and employment rates affect individuals’ ability to buy or rent.
6. Many investors find higher returns in the short-term rental market, reducing available rentals.

Ms Dellow explained:

"These factors combined have pushed rental vacancy rates lower across the country, which have struggled to recover since the pandemic.

In September 2024, the national vacancy rate was 1.2%."

Addressing the real issues

Blaming international students for the housing crisis is a distraction from the hard truths we need to confront.

Decades of underinvestment in housing supply, restrictive planning laws, and a lack of affordable rental stock are the true culprits.

Until these systemic challenges are addressed, targeting a single group will do little more than shift attention away from real solutions.

We need a coordinated approach to unlock housing supply, particularly in affordable segments.

This includes encouraging the development of more PBSA, which not only supports students but also eases pressure on the wider rental market.

Governments at all levels must also commit to long-term strategies to tackle the root causes of housing shortages.

Final thoughts

Pointing fingers at international students for Australia’s housing challenges may feel like an easy solution, but it’s a distraction from addressing the real issues.

The data makes it clear: students are not the driving force behind skyrocketing rents or housing shortages.

In fact, they’re part of a system that, when properly managed, can actually help ease the strain on the rental market.

International students contribute billions to the Australian economy and enrich our communities culturally and socially.

Misplacing blame risks not only damaging our reputation as a welcoming destination but also diverting attention from the systemic housing reforms we desperately need.

The housing crisis won’t be solved by restricting migration or targeting specific groups.

Instead, we need a forward-thinking approach—one that prioritises increasing housing supply, encourages purpose-built solutions like PBSA, and addresses decades of underinvestment and planning gridlock.

It’s time to stop the blame game and start focusing on strategies that deliver real, long-term solutions for all Australians.

About Aska Soo Aska is a passionate and driven professional with many years of experience as a property consultant helping clients achieve their financial goals through property acquisition. She has consulted clients around Australia by reviewing, educating, and advising clients about their financial situation and what they need to achieve their end goal of being financially free.