International Students To Blame For Australia’s Housing Crisis? RBA Comes Out With Facts
- SAGA Magazine
- Jul 29
- 4 min read
Australia’s international student population has rebounded post-pandemic—reaching over 600,000 by mid-2024. While some have blamed the rental and housing crisis on the growing number of international students arriving on Australian shores, the Reserve Bank of Australia has now debunked some myths.
Key Statistics:
International education export income: AUD 29 billion (2023)
Total sectoral net gain: AUD 50 billion (2023/24)
About 50% of students in private rentals
Top source countries: China, India, Nepal, Vietnam
Education is Australia’s 4th largest export
According to the RBA’s July 2025 bulletin, while the growing number of overseas students has modestly increased housing demand, the impact on rent inflation has been minimal compared to the larger structural issues constraining Australia’s rental market.
The RBA states that the impact of international student numbers on rent increases is “modest in aggregate”.
International students contribute substantially to the economy beyond housing demand.
The RBA highlighted that these students generated a net economic gain of AUD 50 billion in 2023/24, making international education Australia’s fourth-largest export sector after iron ore, coal, and natural gas. Their spending extends across sectors, including hospitality, retail, transport, and education services, creating a broad multiplier effect on local economies.
“International students play a significant role in the Australian economy,” the RBA report states, adding that “they contribute to demand through spending on goods and services as well as via direct education fees”.
The sector’s record-breaking $29 billion in direct export income in 2023 marked a return to pre-pandemic momentum and signalled a pivot in how policymakers and the public perceive the value of overseas learners.
Demand Ripple: More Than Tuition
The RBA research found that the financial impact of international students stretches well beyond university bank accounts.
Tuition and institutional fees make up only part of their aggregate contribution. Students from around the world—most prominently from China, India, Nepal, and Vietnam—are also major spenders on accommodation, food, transport, and lifestyle services.
This spending, the RBA emphasises, “adds more to demand in the economy than it does to supply in the short run,” a distinction that has been especially pronounced in the current tight housing and labour markets.
The influx has directly benefited sectors including retail, hospitality, and property management, driving up local business revenues in university precincts and CBDs.
“Education exports are currently Australia’s fourth largest category of export, at approximately AUD$50 billion in 2023/24,” notes the RBA, aligning with data from education and government agencies.
Housing Market Impact: Fact and Figures
Perhaps the most hotly debated consequence of surging student numbers has been the pressure on Australia’s rental market.
According to the RBA’s July 2025 bulletin, while the growing number of overseas students has modestly increased housing demand, the impact on rent inflation has been minimal compared to the larger structural issues constraining Australia’s rental market.
The RBA analysis concludes that about half of all international students reside in the private rental sector. This has aggravated housing affordability challenges, particularly in capital cities such as Sydney and Melbourne, where vacancy rates remain historically low.
Importantly, the RBA clarifies that while student arrivals have put upward pressure on rents, the exacerbation is not as dramatic as some headlines imply.
The RBA’s research estimates that for every 50,000 additional international students renting, private rents rise by only about 0.5 per cent. Given that the international student population surged by approximately 250,000 between 2022 and 2024, this translates to an estimated 1.25 per cent rent increase attributable to overseas students—significantly lower than public perceptions suggest.
Moreover, much of the rent escalation began before Australia fully reopened its borders to international students post-pandemic.
Madeleine McCowage, one of the RBA economists behind the analysis, explains, “Higher demand for housing due to expanding international student numbers has put some upward pressure on rents, especially in areas near universities. However, the housing supply bottlenecks and market conditions have played a far larger role.”
The limited ability to quickly increase housing supply—exacerbated by high construction costs, slow approvals, and changing household structures—remains the key driver behind escalating rental prices
Approximately half the international students live in the private rental market, while the rest reside in purpose-built student accommodation (PBSA) or university-managed housing.
Importantly, the PBSA sector has seen rapid growth, with a 74 per cent increase in bed numbers between 2015 and 2024, which helps absorb demand and reduces pressure on traditional rental markets. Industry projections expect continued expansion of PBSA to meet the growing student population’s housing needs over the coming years.
Employment and Skills: Short-term Push, Long-term Potential
The RBA’s report also highlights the limited short-term relief international students provide to Australia’s labor shortages. Student visa conditions cap the number of working hours, which means “their immediate contribution to the supply side of the economy—particularly the workforce—remains constrained”.
However, those who transition to post-study work visas or permanent residency offer a longer-term boost to Australia’s skilled labour pool, particularly in health, technology, and engineering.
International Students Are Indispensable To Australia
As the RBA underscores, Australia’s education sector is facing “intensified competition” from Western peers, and future growth depends on maintaining quality and facilitating housing, visa, and social support systems.
Stakeholders are urging governments and institutions to invest proactively in student welfare, particularly in rental market solutions and support services.
Education Minister Anne Chandler responded to the RBA findings: “International students are vital for our economy, our universities, and our communities. The numbers are clear—they help drive growth, support local businesses, and enrich the fabric of Australian society.”
The RBA’s research provides a nuanced, statistics-driven perspective that cuts through political debates. It finds that while international students do add to housing demand and urban infrastructure pressure, their overwhelmingly positive economic and social impact makes them indispensable to modern Australia.
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