Foreign Students Competing With Locals for Housing: Report

Students walk around Sydney University in Sydney, Australia, on April 6, 2016. Brendon Thorne/Getty Images

Housing shortages for international students loom as another major challenge for Australian authorities, according to a new report compiled by an online marketplace for university accommodation.

Australia’s student housing market is estimated to be worth $10 billion (US$6.7 billion) and will increase at a compound annual growth rate (CAGR) of 17 percent, according to the University Living study, “Beyond Beds: Australia Student Housing Report.”

Over the past decade, the country has become the top preference for over half a million international students aspiring to study abroad after school, mostly due to its tight labour market, relatively low cost of living, high wages, and well-recognised universities.

This is reflected in numbers from the federal Department of Education, revealing that 613,217 foreign students were studying in Australia as of March this year, a 27 percent increase from March 2022.

University Living estimates this trend to exponentially continue in the coming years in the absence of COVID-19.

“The enrollments in the higher education sector saw a decline from 2020 to 2022, followed by a significant increase in 2023. Much of this increase can be attributed to overseas students coming back to Australia,” the report said.

The main source countries of student enrollment included India with a 28 percent increase, Nepal at 31 percent, Colombian migration doubling with a massive 128 percent increase (albeit from a small base), and Vietnam with a 29 percent increase.

Chinese student enrollment dropped four percent.

A general view of University of Technology Sydney campus in Sydney, Australia, on April 6, 2016. Brendon Thorne/Getty Images

Ongoing Student Migration Will Put Pressure On Housing

Because of the long-standing high demand for tertiary courses, Australian universities have charged exorbitant fees to international students, which some argue is one reason why domestic students pay so little for their studies.

On average, the tuition cost of a bachelor’s degree for international students ranges between $20,000 to $45,000 annually and just $15,000 to $33,000 for domestic students.

These high rates have been a boon to Australia’s economy with figures from the Australian Bureau of Statistics revealing that of the $29 billion that the education sector contributed to the economy in 2022, overseas students accounted for $25.5 billion—a 49 percent jump from the 2014-15 financial year, where overseas students contributed $17.1 billion.

Maintaining this growth trend will require authorities to reconsider housing.

Currently, on-campus accommodation accounts for 10 percent of students, and off-campus for the remaining 90 percent—this means the vast majority of foreign students are effectively competing with locals for housing amid a national supply shortage.

Yet international students are at a unique disadvantage because they lack rental histories and stable employment.

Further, the pricing of on-campus student accommodation has also grown, along with the rest of the property market.

At housing provider Scape’s Darlington complex, for instance, a studio apartment will set you back $739 per week, that is, after you’ve ascended to the top of their current waitlist.

At the University of New South Wales (UNSW) Jacaranda Hall, a self-catered medium studio costs $525 per week.

Students Account for 70 Percent of New Housing

Daniel Wild, the deputy executive director of the Institute of Public Affairs, a free-market think tank, described the situation as dire.

Mr. Wild said government policy had irresponsibly opened up large volumes of migration without first dealing with affordable housing issues.

“These issues with accommodation, rental costs, plus also pressure on infrastructure, roads, congestion—it doesn’t look like it’s being coordinated,” he told reporters.

“Basically, the government has no plan for how to deal with firstly its big expansion to migration and secondly its expansion to international student numbers.”

Mr. Wild further said migration was just a tool to stimulate the economy.

“There’s a tendency to want to use migration as a way of propping up the economy. Obviously, if you add more people to the economy the GDP will get bigger, but of course, that doesn’t do anything for ‘per capita GDP,’” he said.

Earlier this month, the Institute’s report, “Australia’s Housing Shortage-International Student Intake Exacerbating Nationwide Housing Supply Shortfall,” says that between now and 2028 the country will have a shortage of 252,800 units.

It also found international students took up 70 percent of the new housing units in the market, a trend likely to continue.

“From 2025 to 2028, it is expected that international students will take up approximately one-quarter of Australia’s net new housing supply, baking in housing shortages and rising rental prices.”