Are international students behind Australia’s housing crisis?

International students could absorb 70 per cent of the new homes built in Australia between now and 2028, a new study has revealed.

New research from the Institute of Public Affairs (IPA) shows Australia is set to face a housing supply shortfall of more than 252,000 homes in the same time frame.

Sydney is expected to see the arrival of 289,000 international students, who could absorb 79 per cent of the city’s expected new housing supply.

“Sydneysiders already face rising rents, more costly mortgages, and ever deteriorating services and infrastructure that will only be made worse by the announced unplanned jump in its international student intake,” IPA Deputy Executive Director Daniel Wild said.

The report found that last financial year more than 95,000 international students arrived in Sydney, absorbing the equivalent of almost 1.5 times the new housing supply built over the same time period.

This financial year, a further 70,000 international students are tipped to arrive, absorbing more accommodation (114 per cent) of the predicted new housing supply.

“Migration has and will continue to be critical to our economic and social success into the future. However, many Sydneysiders are beginning to question the consequences of large, unplanned increases to migration settings that will only exacerbate their city’s housing shortage,” Mr Wild said.

“Given the size of this unplanned increase in the international student intake and Australia’s housing shortage, students will have no other option than to battle for properties alongside Sydneysiders also looking for housing.”

It’s a similar story in Melbourne with the expected arrival of a net 223,000 international students, who could absorb 46 per cent of the city’s expected net new housing supply from 2023 to 2028.

In Brisbane over the same period, 75,000 students are expected to arrive, absorbing the equivalent of almost one-in-three new houses expected to be built.

Almost half of Hobart’s new housing supply could be needed for international students over the next five years, while in Adelaide 43 per cent could be required.

In Perth, international students could absorb the equivalent of almost a quarter of new houses to be built.

Student Accommodation Council says report unfairly blames international students

But the Student Accommodation Council has expressed concern over the findings, saying the report unfairly tries to blame the international student intake for exacerbating rental supply shortages across the country. 

Student Accommodation Council Acting Executive Director Adina Cirson said the report didn’t take into account that 75,500 students live across 200 purpose-built student accommodation developments and are not impacting on rental vacancy rates. 

“Blame should not fall squarely at the feet of increased international student numbers, when planning, taxation, building costs, archaic approaches to rental reform and a lack of land supply are all impacting on the supply of housing across the nation,” Ms Cirson said.  

“Rather, we should be working on reducing barriers to the supply of at market, rental and affordable housing, including purpose-built student accommodation for both domestic and international students. 

“Providing international students with appropriate purpose-built accommodation keeps them from competing in the private rental market.  

“We need to understand that the delivery of student accommodation needs to be a priority at every level of government – rather than trying to simply cut back on the number of students – which are vital to our service export industry and broader economy.”

Adina Cirson. Photo: LinkedIn.

Last month the council raised concerns that the Australian University Accord review into Australia’s Higher Education system is seriously considering capping the intake of international students. 

“Any caps on the number of international students would have far reaching consequences,” Ms Cirson said.  

”Our November 2022 research found that 16 per cent of students who complete their studies in Australia stay on to work here, critically alleviating workforce shortages and helping to bring vibrancy to our cities. 

“In 2019, around 300,000 international tourists came into Australia to visit an international student, contributing approximately $1 billion to the economy.  

“Attracting international students is essential for our economy and maintaining our highest-performing service export – tertiary education – which was valued at around $40 billion before the pandemic. 

“We will be continuing to advocate at the federal, state/territory and local government levels to ensure our political leaders understand what needs to be done to get more housing for students, and how our sector can help ease market pressures without the need to curb student intake numbers.”

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