Blaming International Students for Housing Shortage Is Misleading: Peak Industry Bodies

People study at the University of Technology Sydney campus in Sydney, Australia, on April 6, 2016. (Brendon Thorne/Getty Images)

Independent higher education providers and the business community in Australia have stated that it is misleading to attribute housing shortages and rental unaffordability to international students.

At a recent Senate hearing, representatives from Independent Higher Education Australia (IHEA) shared their views on a new education bill proposed by the Labor government.

The bill (pdf) introduces a number of measures, including automatic cancellation of registration for service providers unable to meet certain requirements and a cap on the number of international students for each provider.

While the government claimed that the bill would improve the quality and integrity of the international education sector, the IHEA alleged that it was simply about reducing immigration numbers.

Following the reopening of the borders after the COVID-19 pandemic, there has been a sharp rise in migration.

Data from the Australian Bureau of Statistics showed that net overseas migration soared to 518,000 people in the 2022-2023 financial year, up from 204,000 in 2021-2022 and the highest level on record.

The surge in migration has raised concerns among the public about its potential to worsen the housing crisis in Australia.

IHEA’s View on International Students and Housing Crisis

During his testimony on Aug. 6, IHEA CEO Peter Hendy refuted the idea that international students were responsible for housing shortages and rental unaffordability, saying it was misleading.

Citing research by the Property Council of Australia, the CEO said international students only accounted for 4 percent of the rental market.

“There is not necessarily any impact on the rental market that is adverse when it comes to international students,” he told the Education and Employment Legislation Committee.

“While the number of students may, at the very margin, have an impact on that, it is by no means the main issue.”

Similarly, Wendy Black, executive director of the Business Council of Australia (BCA), said the current housing crisis was not caused by international students.

“Poor regulation, failed planning, slow approvals, skill shortages in construction, and high building costs have reduced new housing in the market,” she said.

“No new houses mean higher prices and fierce competition for quality accommodation, further exacerbated by shifts in household size, which have trended down over time and accelerated during the pandemic.”

To solve the housing crisis, Black said the government needed to get to the core of the problem, which was boosting the housing supply.

The executive director also noted that short-term solutions, such as a cap on international student numbers, would have negative long-term consequences for the broader economy.

Business Community Says International Students Couldn’t Fix Australia’s Skill Shortages

At the same time, Black said it was not realistic for the government to rely on international students to fill skill gaps in Australia.

The director explained that overseas students came to the country to learn what they wanted to learn, and those skills were not necessarily what Australia needed.

Furthermore, she said only a small proportion of international students would eventually settle in Australia.

“Only 16 percent will actually then stay on. So it will fill a small gap, but not the full amount,” Black said.

“And so if you’re looking at this to solve a problem for Australia’s skill shortages, it is not the real solution.”

The BCA representative added that the government needed to do a better job at encouraging domestic students to study courses that teach in-demand skills.