Are international students the cause of tension in the rental market in Australia?

Many people believe that international students are the cause of the housing rental market in Australia becoming overcrowded. In it, Mr. Peter Dutton – opposition leader – stated that: “We are cutting at least 80,000 international students because we want Australians to have an easier time renting a house.” But does this statement accurately reflect reality?

International students account for only 4% of rental properties in Australia

Each year Australia attracts about 240,000 international students to study. According to Mr. Dutton, this makes the housing crisis increasingly serious. However, according to the latest statistics from the Property Council of Australia, by 2024, international students will only occupy about 4% of the total rental properties in Australia. This means that only 1/20 apartments are rented by international students, while domestic students account for 6%.

Data and research show rents are increasing despite a decrease in the number of international students

Figures for the period 2019-2023 show a remarkable paradox: average weekly rent in Australia increased by 30%, while the number of student visas issued decreased by 13%.

According to data from the Australian Bureau of Statistics (ABS), a government agency for the period 2017 – 2024 and another study published in early 2024 by the University of South Australia shows: 

“Analysis of data at the national level, both before and after the pandemic, shows a negative relationship between the number of international students and the cost of rent.”

That means, as the number of international students increases, rental costs not only do not increase but even tend to decrease slightly.

International students have little impact on the Australian rental market 

International students often encounter many barriers when renting a house in Australia:

• No local rental history
• No credit record

The option chosen by many international students is a dormitory or student-specific accommodation. In fact, international students are only a small part of the housing crisis and are not the main competitors in the rental market.

The G8 group of leading Australian universities (Group of Eight), including the University of Sydney, ANU and Melbourne, also opposes the policy of limiting the number of international students, saying the impact of students on the housing market is very small.

The real cause comes from supply-demand imbalance and trends

According to the Reserve Bank of Australia (RBA), the main factors putting pressure on the Australian real estate market include:

• New housing supply is not keeping up with population growth
  
• Construction costs increased
  
• Changing living habits after COVID-19: many people need to live alone or have more spacious space.
  

Data from RBA shows:

• The average household size decreased from 2.8 people in the mid-1980s to 2.5 people recently.
  
• From the end of 2020 to August 2022, household size will decrease from 2.55 to 2.48 people, requiring about 120,000 new homes to meet demand.

Conclusion

From all the above research data, it can be confirmed that international students are not the main cause of the Australian real estate crisis. The solution lies in increasing housing supply, regulating urban development policies and improving land use efficiency.