This paper focuses on the role of overseas students in driving rental demand, arguing that the Labour Government has backtracked on plans to reduce overseas student numbers in response to pressure from the education sector. The authors argue this decision will exacerbate the housing crisis and call for reform of the systems that govern pathways for international students.

Findings

• The likely number of student visas issued in 2025 will be fractionally down on the peak year of student visa issuance in 2023. 
• Based on an analysis of Australian Bureau of Statistics data, the authors project an influx of 200,000 overseas students in 2025 which would require an additional 21,119 rental dwellings in Sydney and 18,353 in Melbourne.
• The current rate of new dwelling approvals, particularly for medium and high-density housing, falls far short of meeting this projected demand, indicating a worsening rental crisis.
• The overseas student influx is now so large that it is contributing not only to the affordability crisis, but also to issues of urban congestion, infrastructure shortages and State government indebtedness. 

Recommendations

• A reduction in the overseas student influx.
• University funding is shifted away from the current model, which heavily relies on revenue from overseas students.
• Universities prioritise domestic students and their skill development.
• Implement stricter measures to ensure that overseas students depart Australia upon completing their studies.