The chair of Australia’s National Housing Supply and Affordability Council, Susan Lloyd-Hurwitz, attacked the government’s planned caps for international students, claiming that it won’t ease the rental crisis and will endanger Australia’s second-largest export industry.
Caps on international student numbers would likely have “very little effect” on housing supply, according to Ms Lloyd-Hurwitz.
“Because students are only 4% of renters”, she says.
“A number of them live in designated student housing or, indeed, rent those spare bedrooms from individual households”.
“But it would seem to be fairly damaging to our second-biggest export industry … It is not the case that international students are crowding out renters in our cities”.
“That’s just simply not true”.
Lloyd-Hurwitz’s claims defy both common sense and evidence.
The correlation between the increase of international students and temporary migration is clear.
The number of temporary visas in Australia has increased by around 500,000 over the pre-pandemic peak, as shown in the following chart from Justin Fabo of Antipodean Macro:
As expected, asking rentals have risen accordingly:
It turns out that importing an additional 500,000 renters will increase demand for housing. Funny that.
Lloyd-Hurwitz’ claim that “it is not the case that international students are crowding out renters in our cities” defies logic and evidence.
A report published this year by The Australian noted:
“Australia’s biggest universities are failing to provide 80% of their foreign students with guaranteed housing”…
“Universities have built enough dorm rooms to accommodate only 40,000 students nationally – a fraction of the 205,000 international students they have enrolled to study in Australia this year, while private training colleges have failed to provide any accommodation, even though they have accepted 149,000 foreign students this year”.
Even the Property Council’s Student Accommodation Council executive director, Torie Brown, admitted to The Australian that “The vast majority of students in Australia still live in the residential market’’.
Brown also admitted that rental market was so tight that student housing providers that traditionally catered to international students were seeing more Australian students move in.
Independent economist Tarric Brooker also cited findings from the ABS’ Temporary visa holders in Australia survey showing that international students significantly increase demand for rental housing:
Here are the unvarnished facts without additional commentary straight from the ABS figures:
- International students are much more likely to live alone than the average adult under 40 (7.2% vs 4.2%)
- 14k reside in a boarding school or other on campus accommodation
- 116k live in a detached house, 51k in townhouses and 173k in apartments
- 28% reside in group households as defined by 2 or more unrelated people living together, compared with 13% for the population aged 20 to 30.
- 25k live in homes with 2 or more spare bedrooms, 68k with 1 bedroom spare. 68k live in a home with no spare bedroom’s.
- 35k live in a home needing 2 or more extra bedrooms, 63k with 1 extra bedroom being required as defined by the ABS.
Brooker followed up with data from the Property Council, CBRE and the Australian government further debunking the claim that international students “live in designated student housing”:
Since folks have asked me about it, here are the numbers on purpose built student accommodation (PBSA).
According to the Property Council there are 76.5k beds in the (PBSA) system, CBRE puts the figure at 60k.
Of this 26% of beds occupied beds are held by domestic students.
According to the Property Council in 2021, the total occupation of PBSA beds was 63k. This snapshot was taken at a low point when ~320k international students were in the country due to the pandemic, compared with 696k today.
On these numbers up to 56.6k international students live in purpose built student accommodation (based on Property Council bed estimate since its higher) or up to 8.1% of those currently in the country.
Susan Lloyd-Hurwitz claim about international education being our second biggest export is also a gross exaggeration:
The ABS ranks education as Australia’s fourth biggest export.
However, the value of education exports are wildly overstated because the ABS classifies all spending by international students as an export even though most students pay for their expenditure by working and earning in Australia.
The ABS also does not adjust for commissions paid by universities to foreign education agents, or money sent home by students to their families:
Susan Lloyd-Hurwitz has a long history of working in the property sector, most notably as the CEO of Mirvac.
Somebody should tap her on the shoulder and tell her that she works for Australian taxpayers now, not the industry.
Once a property parasite, always a property parasite.
