International student housing demand outpaces supply

Labor’s proposed international students quota is likely to exacerbate rental demand in major cities that far outstrips the current supply of housing, new first-of-its-kind analysis claims.

Picture: NewsWire / John Appleyard

Labor’s proposed 270,000 international students quota is likely to exacerbate rental demand in major cities that far outstrips the current supply of housing, new first-of-its-kind analysis claims.

The authors at the Australian Population Research Institute have accused the government of having “capitulated to university and associated interests” by setting 2025 quotas under the prospective legislation – for some universities – near their 2023 high watermark.

The new research comes as Labor’s bill appeared to be on the verge of failure in the last sitting week of parliament for the year, after both the Greens and the Coalition declared they would vote down the legislation.

At the core of the new report is the 270,000 “national planning level” international student quota the government has committed to if the legislation were to pass.

This would likely see over 200,000 added to net overseas migration, the Australian Population Research Institute paper says.

This would generate demand for 21,119 rental properties in Sydney and 18,353 in Melbourne, authors David McCloskey and Bob Birrell calculated, using previous figures from the 2021 census about the distribution of international students in capital cities and their dwelling patterns.

Those estimates far exceed the latest figures on dwelling approvals for apartments and townhouses – which the overwhelming majority of international students rent and live in – which was 13,792 in Sydney and 16,732 in Melbourne for 2023-24.

The large number of international student arrivals and the relatively low rate at which they return to their home country have meant they accounted for somewhere between 40 and 55 per cent of net overseas migration immediately before and after the Covid-19 pandemic.

Opposition infrastructure spokeswoman Bridget McKenzie said the report “confirms people are right to feel misled”.

“Is it any wonder the social compact on immigration has snapped in the past two years?” she said.

“Young people have the lived experience of not being able to find a rental property and living in ever-worsening congestion in our two biggest cities.

“Young Australians don’t get a say in these migration numbers, they are decided by vested interests – big universities, big business, big bureaucracy and big unions.

“The report also shows that state governments’ ‘big builds’ are utterly dependent on these migration numbers staying high to the detriment of suburban liveability.”

Education Minister Jason Clare defended the government’s bill.

“We make no apology for bringing migration back to roughly pre-pandemic levels,” he said. “The capping of international student numbers is a key part of doing that.

“Our caps will cut the number of international students at big metro universities and increase them at regional universities.

“The legislation is very simple. It allows the government to cap the number of international students that come to Australia.

“This is what 70 per cent of Australians want. It’s what Peter Dutton says he wants. He should get out of bed with the Greens and vote for it.

“Let’s be very clear. This bill would give Peter Dutton the power to set international student numbers at zero if he wanted to. That’s why it is so bizarre that he is in bed with the Greens trying to stop this.”

The authors suggested their findings did not necessarily mean the government should dramatically cut the number of overseas student enrolments, but instead make sure those students return home after their studies by reducing the post-study visa options available for them.

“We already have a problem of permanent temporaries, largely composed of former students who are resorting to any action that will sustain their stay here, including bogus claims for asylum and administrative appeals against visa rejections,” the authors wrote.

“This underclass is a blight on our society.”

They noted that such international student visas were stemmed by Ministerial Direction 107, signed by then home affairs minister Clare O’Neil in December 2023, which rejigged priorities for public servants when issuing a visa to consider whether the applicant was a bona fide student or not, and would return to their home country.

“The number of student visas issued in the first half of 2024 was much lower than in the same months of 2023,” the report says.

“According to (Home Affairs Department) reports, the total number of primary student visas issued in the year to May 2024 to the vocational and (English-language courses) halved, compared with the previous year to May 2023.”

However, the authors noted that the new caps that Labor has promised to impose if their legislation were to pass would restore high 2023 international student numbers for “second tier” and regional universities.

“These allocations confirm that the original December 2023 policy of enforcing a restriction on overseas students visas is a dead letter,” they wrote.

“The Labor government has capitulated to university and associated interests.”

They said the policy shift would see the administration of student visas essentially switch from the Department of Home Affairs to the Department of Education.

“The Labor government intends to turn the process of student visa issuance into a political football,” they wrote. “There is a good case for the proposed new quota power.

“This is because it facilitates government management (and reduction) of the student intake should it decide to use the power for this purpose.

“However, this is not the end the Labor government is proposing to use it for in 2025. Rather, it is to rescue the universities dependent on those students who do not meet the ‘genuine student’ test.”