Analysis Challenges Rationale Behind Reducing International Student Numbers
Recent analysis of rental vacancy rates in suburbs surrounding inner-city university campuses in Australia’s three largest cities has revealed that these areas often have higher vacancy rates than the city averages. This data undermines the primary argument from both the federal government and the Coalition that international students are exacerbating the housing crisis, prompting renewed scrutiny of policies aimed at slashing student numbers.
Higher Vacancy Rates in Student-Populated Suburbs
The analysis conducted by Universities Australia found that among the 30 suburbs within a five-kilometre radius of Sydney, Melbourne, and Brisbane city centers, only one—Parkville in Melbourne—had a vacancy rate below the city average. Another two suburbs, Kingsford in Sydney and Eight Mile Plains in Brisbane, had vacancy rates equal to the city average.
For example, in Melbourne’s CBD, the vacancy rate was 3.5% in May, which is 2.2% above the city average. This area has a significant population of international students, who made up close to a quarter of the CBD population at the last census. Despite efforts to encourage enrolment in regional areas, 85% of international students continue to reside in Australia’s three largest capital cities.
Political Scapegoating of International Students
Luke Sheehy, Chief Executive of Universities Australia, accused political parties of using international students as scapegoats for the housing crisis ahead of the upcoming federal election. He argued that both sides of politics are unfairly blaming students for broader issues in the housing market, ignoring the substantial economic benefits they bring.
“Both sides of politics are treating international students as cannon fodder in a poll-driven battle on migration with little regard for the enormous benefits they bring to our nation,” Sheehy said. “International students accounted for more than half of Australia’s GDP growth last year. The sector is worth almost $50 billion to our economy and supports around 250,000 jobs.”
Economic Impact of Reducing International Student Numbers
Universities Australia estimates that since the federal government began cracking down on overseas students, the Australian economy has already lost $4.3 billion, and 14,000 jobs have been cut. Sheehy described these measures as a high price to pay for a “Band-Aid solution” to housing problems that international students are not responsible for.
Upcoming Legislative Changes
On Tuesday, a Senate inquiry will examine proposed changes to federal legislation that would allow the government to cap the number of international students enrolling at individual universities and colleges, potentially down to specific courses. Education Minister Jason Clare has framed these cuts as necessary to protect the integrity of the education sector by eliminating substandard colleges and agents and reducing pressure on housing and urban infrastructure.
Government and Opposition Plans
The government’s amendments to the Education Services for Overseas Students Amendment (Quality and Integrity) Bill include provisions that universities and colleges can only exceed their allocated caps if they can demonstrate investment in student-specific accommodation.
Labor’s plan aims to reduce net overseas migration to 235,000 over the next three years, which would require reducing student arrivals to about 95,000—40% of pre-pandemic numbers. The Coalition, led by Opposition Leader Peter Dutton, proposes even steeper cuts, aiming to reduce net migration to 160,000, significantly impacting student inflows.
Contesting the Housing Crisis Narrative
The impact of international students on the housing market has been heavily debated. One report in May found that international students constitute only 4% of the rental market. Another report suggested that the housing crisis would persist even if there were no international students in the country. These findings challenge the narrative that international students are a primary cause of housing shortages, highlighting the need for a more nuanced approach to migration and housing policy.
As the federal government and the opposition push for stricter limits on international student numbers, the latest analysis of rental vacancy rates calls into question the rationale behind these measures. With significant economic contributions and only a minor impact on the housing market, international students should be recognized for their positive role in Australia’s economy rather than being scapegoated for broader systemic issues. The upcoming Senate inquiry will be crucial in determining the future direction of these policies and their impact on the higher education sector and the Australian economy.
