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Industry leaders warn that that policymakers are using international student numbers as a “cover” for Australia’s rental crisis, but a better solution is hiding in plain sight.
The federal government’s Migration Strategy has raised alarm bells among property experts, who fear that a reduction in international student numbers could have serious repercussions for the country’s economy.
“In a globally competitive environment for the best and brightest, we need to cultivate the brainpower essential for driving Australia’s future prosperity,” said Matthew Kandelaars from the Property Council of Australia (PCA).
Pre-pandemic, the international education sector was “the nation’s top service export” and contributed $40 billion to economic output, stated the PCA.
Mr Kandelaars stressed that international students “spend roughly $4,000 per month in our economy, and otherwise attract 300,000 visitors each year who visit them and drive our tourism numbers”, making international students a vital life source for urban economies.
One of the main impetuses behind the federal government’s plan to cut back international student numbers is the claim that migration is inflating the housing costs, but Everybody’s Home spokesperson Maiy Azize warned that the “real cause is decades of government policy that has pushed up the cost of housing”.
“Instead of pretending the housing crisis has been imported into Australia, the government needs to take responsibility for the causes of the problem – and start fixing them,” said Ms Azize.
In their focus on total student numbers, Mr Kandelaars stated that the government has overlooked “a solution to housing international students” that has been “hiding in plain sight”: purpose-built student accommodation (PBSA).
“The sector ensures a strong pipeline of beds that take nearly 80,000 people each year out of the wider rental market – reducing demand and easing affordability,” Mr Kandelaars said.
According to a recent report by Savills, PBSA “remains at its most feverish point and is tipped to further increase”.
Despite high demand, the report revealed “an easing pipeline of PBSA development forecast to be delivered over the next three years, with the total number of student beds dropping by more than 50 per cent compared to the last three years”.
Paul Savitz, director of operational capital markets at Savills, said: “We anticipate that investors will continue to back student accommodation due to the capacity for rents to keep pace with inflation.”
“An all-to-familiar imbalance of demand over supply is continuing to fuel strong annual rental growth in student accommodation over the short term, which we anticipate could, in some markets, still be double digit in 2025,” he added.
Ultimately, Ms Azize emphasised the importance of addressing the root causes of the rental crisis rather than focusing on band-aid solutions.
“Government policy created the housing crisis. Only government action can fix it,” she said.
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