Do international students really drive up Australian rents

Every leasing season, the same accusation resurfaces. Rents are brutal, international students are visible around the big campuses, and the conclusion writes itself. For a diaspora that sends many students to Australia, the question deserves data rather than heat.

What students are, and are not, in the rental market

Start with the share. International students make up about 6 per cent of Australia’s rental market, according to Beyond the visa cap, a report prepared by Mandala Partners for the Student Accommodation Council, an arm of the Property Council of Australia. Roughly 40 per cent of students live in university halls or purpose-built accommodation, outside the general rental pool entirely, and the Mandala work found the student share varies by state, from 7 per cent of renters in Victoria to 5 per cent in Queensland and South Australia.

The Reserve Bank reached a similar reading. In a July 2025 Bulletin article, International Students and the Australian Economy, the RBA noted that about half of international students rent privately and that they cluster in inner-city suburbs at roughly twice the rate of domestic students. Numbers climbed steeply as borders reopened, from under 300,000 in 2022 to about 560,000 by the end of 2023. Education is worth around A$50 billion a year and ranks as the country’s fourth-largest export, so the stakes cut both ways.

The squeeze is real

None of this means renters are imagining the pain. SQM Research put the national vacancy rate at 1.3 per cent in June 2026. Perth was at 0.6 per cent, Adelaide 0.7 per cent and Brisbane 0.9 per cent, with Sydney and Melbourne at 1.6 per cent.

Rents followed. In a market this tight, every extra bidder is felt, and students are among them in the inner ring.

What the modelling actually finds

Here the myth and the data part ways. The RBA modelled the effect directly: an extra 50,000 renters lifts private rents by about 0.5 per cent. Applied to the student surge, the Bank concluded that international students accounted for only a small share of the rent increases since the pandemic.

Mandala’s report lands in the same place from another angle. Cutting student numbers through visa caps, it found, would lower metropolitan rents by about A$5 a week, with the savings greatest in inner-city and CBD locations around major universities rather than in the suburbs.

Timing is the giveaway. Some of the steepest increases arrived before borders fully reopened. Migration has since turned down, with net overseas migration falling to 306,000 in 2024-25, the second straight annual drop from a peak of 538,000 in 2022-23, according to the ABS, even as Canberra lifted the 2026 student cap to 295,000. Rents kept climbing anyway.

The bigger problem is what is not being built

Supply is where the shortfall sits. Australia completed about 173,000 homes across the four quarters to March 2026, the ABS reported, while commencements fell 11.2 per cent in the March quarter alone. The National Housing Accord aims for 1.2 million homes over five years, a pace of 240,000 a year. The National Housing Supply and Affordability Council expects around 980,000 to be built in that window, and found that in the Accord’s first 18 months completions ran roughly 55,000 homes behind underlying demand. The Council describes a persistent inability of the housing market to supply enough homes to meet demand.

A fairer way to read it

The honest account holds two things at once. In a few inner-city pockets near the large universities, student demand does add to a genuine squeeze, and pretending otherwise helps nobody. Across the country, students are a small slice of the market, often among the most vulnerable tenants, and capping them buys renters a few dollars a week while putting a A$50 billion export sector and the jobs behind it at risk.

For Indian-Australian families, many of whom rent in these same suburbs and send students into them, that distinction carries weight. The rent problem was assembled over two decades of under-building, and it will ease only when more homes are finished. Students have become the convenient face of a shortage they did not create, which is a poor substitute for the cranes the country actually needs.