An economic analysis undertaken by the Group of Eight (Go8) which demonstrates there is no direct link between international student numbers and the nation’s current housing crisis.
The Go8 policy paper entitled “International students and housing and other cost of living pressures” reveals the housing affordability and more general cost-of-living crisis is fundamentally a supply side problem, rather than attributable to international student numbers.
Go8 Chief Executive Vicki Thomson said in a statement that “the number of international student arrivals has no direct bearing on underlying supply side factors.”
“It includes decades of underinvestment; Government regulation, planning approvals, elevated construction costs and workforce shortages; supply chain disruptions; and weak productivity growth,” said Ms Thomson.
She added that the international student demand for housing is stronger in some inner city areas of Sydney and Melbourne where demand already exceeds supply. Because of this reason Go8 universities and purpose-built student accommodation providers are investing heavily in affordable student accommodation options.
Ms Thomson added: “Our universities also have a substantial forward plan of additional supply across the next decade.”
She further observed that these supply issues cannot be solved overnight and regardless of international student intake, Australia would still be facing a housing crisis.
“Any plans to impose a cap on international students as one mechanism to ease housing pressure – especially during a domestic skills crisis – is shortsighted and risks putting a brake on Australia’s economic growth and prosperity,” noted Ms Thomson.
In 2023, following a downturn during the COVID-19 pandemic, total spending by international students bounced back to $47.8 billion.
Further, international students contributed an 0.8 per cent increase in GDP over 2023 (more than half of the recorded 1.5 per cent economic growth) according to the National Australia Bank.
Ms Thomson cautioned against putting the “blame to one cohort of students who were responsible for most of the nation’s economic growth.
International education is one of Australia’s greatest export success stories and is critical to our future prosperity.
Ms Thomson said: “Australia is in a global race for top international students who go on to earn advanced qualifications and help Australia’s drive to become a knowledge economy. Only around 16 per cent of international students who study in Australia remain long term, but those who do contribute to our skills and talent pool in critical areas such cyber security, defence, engineering and energy sectors. We need to encourage more high-quality international graduates to stay longer.”
The Go8 has backed the Albanese government’s goal to embed quality and restore integrity at all levels of the broader education sector.
“We need to target and retain high quality students to supplement our domestic workforce where there are skills gaps, and to boost sovereign capability,” Ms Thomson said.
The Albanese government has initiated a crackdown on ghost colleges and student visas, aiming to refine the overall migration strategy by implementing crucial recommendations from the migration review.
These recommendations encompass: raising the English language criteria for student visas; granting authorities new capabilities to halt high-risk educational institutions from enrolling international students; and introducing a new genuine student assessment to more effectively deter individuals seeking to enter Australia primarily for work rather than study.
By targeting universities deemed at higher risk of admitting students for work rather than study, the Albanese government hopes to streamline the migration process and uphold the integrity of the education system.
Home Affairs Minister Clare O’Neil has said the government has been successful in reducing net migration and the goal of returning migration to pre-pandemic levels was clear.
“Since September, the government’s actions have led to substantial declines in migration levels, with recent international student visa grants down by 35 per cent on the previous year. The actions this weekend will continue to drive migration levels down while delivering on our commitments in the Migration Strategy to fix the broken system we inherited,” Minister O’Neil said.
Go8 represents Australia’s leading research-intensive universities and either provide or facilitate access to accommodation that caters for over 83,000 students. This is equivalent to approximately two international students at a Go8 university for every per student accommodation supply.
Ms Thomson’s comments come after a recent report by IDP Education revealed a notable transformation in the preferences of international students regarding study destinations, particularly in the United States, Australia, and Canada.
Australia and Canada, once standing shoulder to shoulder at the forefront, have seen a shift in their positions, now trailing behind in second and fourth places respectively.
The prominent deterrents cited are the soaring costs of living and education, marking a significant sway in the aspirations of prospective international students.
While Australia’s ranking as a preferred study destination witnessed a marginal decrease of two percent to 23 percent compared to mid-2023, student satisfaction levels have managed to hold steady.
The United States claimed the top spot with a commanding 24 percent, closely followed by Australia at 23 percent, then Britain with 22 percent, Canada with 19 percent, New Zealand with 4 percent, and Ireland with 2 percent.
The IDP report observed that tuition fees and the cost of living emerged as the foremost deterrents for international students considering Australia for their education journey. On the flip side, factors such as education quality, employment prospects, and value for money emerged as pivotal drivers in the decision-making process for prospective students.
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