Australia’s Housing Shortage – International Student Intake Exacerbating Housing Supply Shortfall In Capital Cities

Research by the Institute of Public Affairs (IPA) finds that over the six years to 2028, Australia is set to face a net housing supply shortfall of 252,800 units. A key contributor to this housing crisis is the Commonwealth Government’s inability to rein in the influx of migrants subsequent to the lifting of international borders after the COVID -19 pandemic. A net of 1.755 million new immigrants are set to call Australia home between 2023 and 2028.

The Australian Financial Review has attributed this steep rise in migration to ‘a rebound in the number of people living in Australia on student visas’. This was subsequently acknowledged in the May 2023-24 Budget:

• The reopening of international borders has seen a rapid recovery in the stock of international students, skilled temporary visa holders and working holiday makers in 2022-23. Second and third-year students who were studying online during the pandemic have been returning, in addition to those arriving in Australia to begin their studies.

Almost two-thirds of the more than 400,000 net new migrants in the financial year ending 2023 have arrived in Australia on student visas. Another two thirds of the subsequent year’s net migration intake will be made up of international students.

Many international students come to Australia for the primary purpose of working and seeking permanent residency rather than getting an education. Indeed,  part-time work opportunities and a pathway to permanent settlement are the major selling points of educational and immigration agents, as well as tertiary education institutions, seeking to attract international students.

This research report studies the impact that the present volume of international student arrivals has, and will continue to have, on Australia’s housing shortage. The consequences of the unprecedented influx of international students are not just felt by Australians but also the international students themselves, whose educational experience suffers as a result of issues associated with a lack of housing availability, especially in Australia’s capital cities.

In Australia’s capital cities, where most international students reside, the percentage of international students to new housing supply was as follows in the financial year 2023 (note: greater than 100 per cent indicates that international students occupied an equivalent to all the new housing supply, as well as consuming existing supply):

• Melbourne: 80%
• Sydney: 147%
• Brisbane: 57%
• Perth: 63%
• Adelaide: 89%
• Hobart: 103%
• Darwin: 140%
• Canberra: 55%