International students are filling 7 per cent of rental housing, government claims
As Australians struggle to find affordable housing, a new government analysis warns that ‘conservatively 135,000 new international students will enter the private rental market next year’.
Foreign students occupy 7 per cent of rental housing as Australians struggle with soaring rents in capital cities, new government data reveals.
The federal Education Department estimates that 135,000 international students who arrive in Australia next year will need private rental accommodation.
As education providers fight federal government plans to restrict immigration by cutting student visas, the new analysis links the post-pandemic surge in international students to steep rent rises in capital cities.
Median rents have soared 71 per cent in Sydney’s CBD since 2021, when Australia opened its borders after the pandemic.
The Education Department’s analysis of the $48bn international education sector calculates international students occupy one in every 14 rental homes nationally.
The data, based on 2024 population data, rebuts a widely cited Student Accommodation Council estimate of 4 per cent. The Education Department claims the SAC analysis is flawed because it uses 2021 population data, when border closures during the pandemic halved the number of international students in Australia.
Citing the latest Department of Home Affairs data, the new analysis shows 696,162 student visa holders living in Australia in July this year – 91 per cent more than the 2021 Census data.
“The 4 per cent national average figure based on the Census would be more like 7 per cent based on 31 July 2024 figures,’’ the Education Department states.
“The 4 per cent figure was for the entire Australian rental market and does not reflect the heavily skewed residential location of international students, and the significant housing pressures in inner-city locations with a higher concentration of international students.’’
The department claims the number of international students enrolled in inner-Sydney universities and training colleges is equivalent to 42 per cent of the Sydney CBD population. However, many students enrolled to study in the central business district live in cheaper suburbs.
In Melbourne City – where foreign student enrolments are equal to 18 per cent of residents – rents have surged 67 per cent.
And in Brisbane’s CBD, where international student enrolments are the equivalent of one in eight city residents, rents rose 56 per cent between 2021 and 2024.
Universities, which rely heavily on revenue from international students, are furious the government has won opposition support to cap the record number of student visas at 2023 levels. The richest universities – the Group of Eight – stand to lose $1bn a year in revenue after the government slashed 20,000 students from their 2025 quota.
Half of all students at the University of Sydney, and more than 40 per cent at the University of Melbourne, come from offshore, with most from China and India.
The government has angered universities and private training providers by capping the number of new student visas next year to 270,000. Based on this quota, the department says that “conservatively 135,000 new international students will enter the private rental market next year’’.
It says half of all foreign students rent privately, while a quarter live with parents, relatives or friends, 20 per cent in student accommodation and 3 per cent in homestay arrangements.
The department analysis shows that 90 per cent of all international university students live in Sydney, Melbourne, Brisbane, Adelaide, Perth and Canberra.
“Around 50 per cent of all international students currently reside in the private rental market,’’ the analysis states. “Even small impacts on the demand and supply of housing can impact on rents and housing affordability.’’
The Reserve Bank has estimated that rents will fall by 2.5 per cent for every 1 per cent increase in dwelling stock.
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