Two reports released this week by Australia’s Group of Eight (Go8) and the Property Council of Australia have found no direct link between international student numbers and the country’s housing crisis. Both organisations caution against introducing a ‘hard’ cap on international student numbers, saying this is shortsighted, is likely to damage the higher education sector and the economy, and fails to address supply-side issues.

Analysis undertaken by the Go8, the organisation representing Australia’s leading research-intensive universities, debunks the myth that international students are the cause of the housing crisis. Instead, supply-side factors, including “decades of underinvestment” in housing supply, a lack of affordable housing, regulatory barriers and costs, inadequate planning, elevated construction costs and supply chain disruptions are to blame. 

National Australia Bank analysis highlights that international student spending contributed a 0.5 per cent increase in GDP over 2023, with tuition fees contributing an additional 0.3 per cent (more than half of the recorded 1.5 per cent economic growth). Go8 Chief Executive Vicki Thomson warns that a cap on international students puts this at risk: 

“These supply issues cannot be solved overnight, and regardless of international student intake, Australia would still be facing a housing crisis. Any plan to impose a cap on international students as one mechanism to ease housing pressure – especially during a domestic skills crisis – is shortsighted and risks putting a brake on Australia’s economic growth and prosperity.” 

The Go8 report notes that some Australian universities have already been forced to consider redundancies because of a reduction in international student numbers, citing the example of Federation University, which is “reported to be making about 200 staff redundant due to a fall in revenue and international student enrolment.”

The Go8 report was released just days after the Property Council of Australia’s Student Accommodation Council released its analysis, which also concluded that international students are not to blame for Australia’s housing crisis. According to the Student Accommodation Council, in addition to structural supply-side issues, “the rise of smaller and solo-person households, intrastate migration and a trend to re-purposing second bedrooms into home offices” are additional factors impacting the supply and affordability of rental homes across the country.

The Student Accommodation Council report highlights that sharp increases in rental prices in Australia began in 2020 when the COVID-19 pandemic had halted international student migration and most international students had returned to their countries. The report also indicates that the current pipeline of 7,770 new purpose-built student accommodation (PBSA) beds due by 2026 is not enough to alleviate demand in the private rental market. According to the Student Accommodation Council analysis, an additional 66,000 new beds will be required by 2026 to maintain the proportion of international students living in PBSA at 9% by 2026 or an additional 84,000 beds to house all new international students by 2026, increasing the proportion of international students living in PBSA to 19%.