Australia is sending mixed messages to international students at exactly the wrong moment.
On the one hand, international education remains one of our largest service exports, supporting billions in economic activity and thousands of jobs across universities, construction, accommodation, retail and hospitality. On the other, volatile visa decisions and tightening signals are creating real uncertainty about whether Australia still wants to compete.
That uncertainty is not theoretical. Student visa refusal rates hit 32.5 per cent in February, the highest monthly rate in 20 years. For a sector built on long lead times, investment certainty and reputation, stop start policy is corrosive.
Other countries are being far clearer about their intent. New Zealand now openly frames international education as a NZ$4.5 billion export it wants to grow to NZ$7.2 billion by 2034 under its Going for Growth plan, with a focus on quality and regional benefit. Canada, by contrast, has moved to slash international student admissions by nearly 50 per cent. That decision is often cited in Australia as a cautionary tale about growth. It should be read differently.
Canada is dealing with the consequences of a structural failure it chose not to fix. It allowed student numbers to grow without ever building the housing needed to support them. When pressure mounted, the easiest lever was visas. Australia should not import that conclusion when we did not make the same mistake.
Australia has invested heavily in purpose built student accommodation. There are now more than 90,000 privately owned and managed PBSA beds nationwide. When on campus and college accommodation is included, Australia has around 134,000 student only beds. Supply is on track to reach more than 144,000 beds by 2027.
This matters because the housing debate around international students is deeply disconnected from fact. A 2024 report by Mandala for the Student Accommodation Council found international students account for just 6 per cent of the total rental market. That figure directly refutes the idea that students are driving broad housing unaffordability.
International students are among the cohorts most likely to live in purpose built accommodation when it is available. PBSA is designed around academic cycles, student wellbeing and pastoral care. It operates differently to the general rental market. Every PBSA bed delivered removes demand from the private rental market.
The policy link between student visa settings and housing delivery is already working. Government requirements tying university enrolment allocations to accommodation availability have helped lift the national PBSA pipeline to around 40,000 beds as of the second half of 2025, up from 36,000 at the start of the year. Growth in student migration is actively generating more housing supply, not consuming it.
Yet this progress is being undercut by inconsistent treatment across planning and tax systems. Planning delays, uneven council support and state based tax barriers continue to stall projects that are otherwise viable and ready to deliver.
In Victoria, foreign investor surcharges can cost 126 per cent more per bed than comparable jurisdictions. That is not a marginal difference. It is enough to suppress supply entirely, even as the federal government asks the sector to house more students.
By contrast, build to rent has received permanent land tax concessions in New South Wales, while PBSA remains excluded, despite playing an equally direct role in easing rental pressure. This uneven treatment sends mixed signals to long term institutional capital that Australia needs to attract.
Globally, governments are moving in the opposite direction. The European Commission has formally recognised student housing as essential infrastructure and elevated it as a strategic priority across housing, education and competitiveness policy. Australia should do the same.
If governments want international education to remain sustainable, visa settings, housing supply, tax policy and local planning decisions must operate as a single system. Managing student visas through blunt caps, while failing to deliver the infrastructure that supports them, does not solve housing stress. It simply shifts it into surrounding suburbs.
The policy path forward is clear. Maintain the current national planning level and resist further arbitrary enrolment caps. Remove state level tax barriers that suppress PBSA investment. Frame international student migration for what it is: a managed, infrastructure backed system, not an open door.
Australia has built a world class international education offering. It has also built much of the housing needed to support it. The risk now is not growth. The risk is letting policy incoherence undermine one of our most important exports.
Dr Adele Lausberg is the Executive Director at the Student Accommodation Council
