Minister Concedes Immigration Too High as Students Compete for City Rentals

Education Minister Jason Clare has conceded Australia’s migrant intake remains too high as new government analysis reveals international students are making up about 7 per cent of the country’s private rental market, and more than 20 per cent in inner Sydney and Melbourne.

Clare said a combination of international students, backpackers and people overstaying their visas were driving migration numbers beyond the government’s forecasts after Australian Bureau of Statistics figures showed Australia’s migrant intake will exceed 400,000 for the 2023-24 financial year.

As the blowout escalates a political debate about immigration and its impact on housing, with the opposition seeking to paint Labor as weak on migration and blind to voters’ cost-of-living concerns, Clare challenged the Coalition to back the government’s foreign student caps to help bring numbers down.

The education department’s analysis shows about half of the 696,162 student visa holders in Australia were living in the private rental market in 2024, while another 135,000 students will enter private rentals next year under conservative estimates.

But those numbers are skewed towards 18 local government areas where international students are more than 10 per cent of the population – such as the Sydney and Melbourne city centres, as well as around the Sydney suburbs of Burwood and Strathfield – while they are less than 1 per cent of the population in the country’s remaining 406 councils.

Education department deputy secretary in charge of higher education, Ben Rimmer, this month told a senate inquiry there was reliable data showing that overseas students were competing for rental supply, and challenged narratives that sought to understate that fact.

“Fairly obviously there are not many international students in the private housing market in North Geelong or in Wilcannia. There are a large number of international students in the private rental market in inner Melbourne and inner Sydney,” he said.

“There are some local government areas where international students make up 20 per cent or more of the private rental market. I have no beef against the international students involved—I hope you understand that—but the idea that it has no impact on rents and on availability of rental supply is simply false.”

Clare said the high number of student arrivals were the key reason the government was trying to introduce foreign student caps, which would limit the number of new arrivals to 270,000 next year.

“The opposition still haven’t said if they’ll vote for it or not,” he said on Friday morning.

“Immigration is too high, we’ve got to bring it down… There’s three parts to this number. One part is international students. We’ve seen students come back very quickly after the pandemic. Part of it is backpackers, and part of it is people overstaying their visas.”

Home Affairs data shows that, in the 2024 March quarter, numbers of student visa holders (671,359) and working holidaymakers (183,668) were at their highest levels since before the pandemic. That contributed to a net overseas migration figure of 388,000 in the first nine months of 2023-24 – just 7000 people shy of the government’s annual forecast.

The legislation to limit student arrivals – which will also introduce a raft of integrity measures to weed out providers exploiting the student visa system – remains stalled before a senate committee as its reporting timelines keep being delayed.

Deputy Liberal leader Sussan Ley did not say whether the Coalition would back the government’s bill. “The issue here… is not what’s in the Parliament now, but what the government said they would do about migration numbers,” she said.

“We’re now going to hit 400,000 migrants this year, [for the] second year in a row, maybe 500,000. The government’s not doing what they said they would do with the overall migration number. So if you’re struggling to find a house or your rents are going up, this is why.”