The pressures on Australia’s housing market are multi-faceted, rapidly changing and systemic. For at least twenty years the supply of new housing stock has failed to match the growing needs of a modern-day Australia.
It’s a complex, global problem.
It is not, however, the fault of international students.
Migration, long the backbone of our economy, national identity, and talent pool, is but one element putting pressure on an overheated system.
The cost of construction, slow planning approvals, a shift towards smaller and solo households, a trend towards home offices rather than bedrooms, the rise of short-stay, inadequate urban infrastructure and state-based taxes and charges that contribute between 20-40% of the cost of a new home have all conspired to create a perfect housing maelstrom.
Addressing these issues will require long-term collaboration between government, industry, and the community. But in an election year, quick fixes are often prioritized over systemic solutions.
There is, however, one relatively immediate way to relieve pressure on the housing market: supporting the growth of purpose-built student accommodation (PBSA). Unlocking the private sector’s potential to deliver high-quality housing for students could quickly reduce demand in the rental market without compromising other housing needs.
And before I’m criticised for pushing my own barrow, if the arguments in favour of reforming our international education system were based purely on educational outcomes, my members would have very little to say in this debate. But from the outset the availability of housing has been used as a reason for enforcing restrictions on student visa holders.
An increase in student accommodation was originally suggested as a reason for universities to go above their caps – a clear sign of the government’s desire to see purpose-built student accommodation grow. Following the unholy alliance of the Greens and the Coalition uniting to kill the bill, this carve-out appears dead in the water. But the rhetoric surrounding students and the role they play in the housing market remains, with the simple “it’s not me it’s you” message resonating widely across voter-land.
The reality is international students don’t buy homes. So, the impact they have is in the rental market. But even then, their role is significantly over-stated – they make up only 6 percent of the rental market and are clustered in CBDs and close to universities, not in the suburbs preferred by families.
Further, they are increasingly serviced by the purpose-built student accommodation sector. This building type didn’t exist 15 years ago, but now houses over 100,000 students Australia wide. Partnered with the 184,000 students living in colleges, on-campus, homestay or living with family and friends, international students are an efficient consumer group in the housing ecosystem.
It’s not often that government is gifted with a solution like PBSA. Not only is it a private sector driven solution, it directly soaks up the demand both international and domestic students put on rental homes. Plus, it provides safe, professionally managed accommodation that ensures students have a positive experience. In just 15 years, PBSA has grown from zero to doubling its supply in the last decade, with an additional 33,000 beds in the pipeline across capital cities.
The easiest way to maximise student-only housing would simply be to take a strategic look at the impediments dampening the supply pipeline and a collective will across state and local governments to fix these blockages.
The PBSA sector is underpinned nearly entirely by foreign capital, meaning the sector is disproportionately stung by foreign investor fees. These taxes were originally designed to deter foreign buyers from purchasing Australian homes and leaving them vacant but instead unintentionally hinder PBSA growth—the very buildings that keep international students out of residential homes.
Planning systems that hold PBSA buildings to the same guidelines as residential apartments are also cumbersome. For example, local government planners often try and impose inappropriate car-parking requirements that fail to recognize students’ lifestyle patterns and dependence on walking and public transport.
State-based Residential Tenancy Acts exempt university accommodation but apply ill-fitting regulations to private PBSA providers, treating them like individual mum-and-dad landlords. This professionally managed asset class, with dedicated leasing teams, operates under guidelines that fail to reflect its unique nature. For instance, current laws prevent denying pet requests, even in an 800-room building with tenants who may only be in the country for a semester.
In a time of heightened political rhetoric and genuine housing stress, solutions require collaboration, not finger-pointing. By working together, governments, universities, and PBSA providers can ease housing pressures while delivering world-class student accommodation. The private sector is ready and willing to invest; unlocking this potential depends on political will. Where there’s a will, there’s a way.
Torie Brown is the Executive Director – Student Accommodation Council, a division of the Property Council of Australia
