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New research reveals how both vacancy rates and rental prices could shift thanks to an incoming cap on international student numbers.
According to a report commissioned by the Property Council of Australia (PCA), the housing impact of a decrease in international student numbers is likely to be marginal.
Formally referred to as a “National Planning Level” for international student intake, the move was announced by Minister for Education, Jason Clare, earlier this year, with the new numbers set to apply to the 2025 school year. Under the policy, 270,000 international students will be allowed to be enrolled across Australian universities for the year, divided between the higher education and vocational education and training (VET) sectors.
It has been pegged as an effort to return migration levels to pre‑pandemic levels, in part because of the stress that housing markets have been under since international arrivals surged following COVID-19 lockdowns.
According to the PCA report, which was conducted by Mandala Research, those hoping that the forthcoming cap will bring a noticeable change to the rental market are likely to be disappointed.
The research showed that the proposed visa caps of international students are set to lower their share of the overall national rental market from 5.4 to 4.8 per cent in 2026 – an impact of less than 1 per cent.
Examining the flow-on effect to rents, that’s expected to only impact markets with a high student population, such as metropolitan areas, pushing down prices by 0.8 per cent on average, which equates to roughly $5 per week.
Of course, varying levels of international student numbers across Australia’s states mean that they are all likely to experience different levels of impact.
Victoria reportedly has the highest share of international students in the rental market, at 7 per cent of renters, while in NSW and Western Australia international students account for 6 per cent of tenants. Queensland and South Australia both sit at 5 per cent of renters. The ACT, Tasmania and the Northern Territory come in at 4 per cent, 3 per cent and 2 per cent, respectively.
Executive director of the PCA’s student accommodation council, Torie Brown, commented that the report’s findings should push policymakers to adjust their priorities.
“Instead of stopping demand from migration, we need to focus on delivering more homes across all quadrants of Australia’s housing market,” Brown said.
“The student visa caps will have a very real economic impact, but have very little impact on rental availability,” she added.
Brown also urged governments to look at ways that the development of purpose built student accommodation (PBSA) could be incentivised to alleviate housing pressures.
“Instead of unfairly blaming international students for the rental crisis, governments at all levels need to work together to expedite and accelerate student-only housing.
“We need to tackle the full range of factors pushing up rents and shrinking housing supply, not pin the blame on one group,” she said.
The legislation to push forward with the government’s proposed caps has not yet passed Parliament. A Labor-led Senate committee has recommended that the current bill be amended to remove course-level limits on international student intake. There are currently two sitting weeks left of this year for the bill to pass.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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