When Raj first moved to Australia to begin a Masters in Business at Adelaide University, he was fulfilling a lifelong ambition to study abroad.

“I think it started off as a dream,” he recalled.

Today he has a happy home, shared with a flatmate and a dog, Biggie, but when Raj first landed in 2022, it was extremely difficult to secure a place to live, as a student with no local rental history nor employment.

Eventually he found a room to rent in a share house in Adelaide’s suburbs with other international students and workers, but it was less than ideal.

“It was a four-bedroom house that had been converted to a six-bedroom house,” Raj told the ABC.

“There was a garage in which a family of three were living. It was a mum and her two children, and they were living in that garage because that was what they could afford.”

He stayed there for a year, but when the landlord started letting out each new spare room to multiple people, he decided it was “very unlivable” and moved out.

“A house with nine people, if you have two toilets and one bathroom, it can’t take that much.”

When Raj moved out he said his room was taken by two international students who paid higher rent than him.

International students ‘cash cows milked by the system’

International students have become one of the targets of growing discontent about Australia’s lack of affordable housing.

The post-COVID surge in migrants — including overseas students — has been blamed for exacerbating the rental crisis.

Housing is shaping up to be one of the key issues ahead of next year’s federal election, and in August the government announced a key policy measure aiming to address it: a cap of 145,000 international students for public universities.

Major universities are strongly opposed. After all, international students have made up a significant proportion of enrolments — half at some, like the University of Sydney — and a significant proportion of their income from their higher fees.

Western Sydney University Vice-Chancellor George Williams believed the solution to the housing crisis was building more housing.

As former student Raj put it, “international students are basically cash cows that are milked by the system”.

Education Department data shows in 2023, there were 328,089 international students commencing study in Australia, with 146,220 of those at publicly funded universities.

The numbers for 2024 are believed to be much higher.

But data from the Property Council of Australia shows there were fewer than 130,000 student accommodation beds available, which would be taken by local and international students — leaving the remainder to find a room in the private rental market.

The Student Accommodation Council, a subset of the Property Council, released a report stating international students make up just 4 per cent of the rental market, and therefore could not be blamed for the broader housing crisis.

But the Education Department contests that and said it’s likely closer to 7 per cent and higher in inner-city areas. 

And an investor slide presentation by Mirvac released earlier this month showed overseas migrants are a strong driver of demand for housing, with students making up a sizeable portion of that population growth.

Torie Brown, the executive director of the Student Accommodation Council, said more purpose-built student accommodation was desperately needed

“International students are quite vulnerable when they arrive in Australia. They don’t understand our rental laws, and they’re often not across what their rights are, and there are people who take advantage of that,” she said.

Ms Brown also noted overseas students were “not the preferred tenant for landlords”.

Hurdles to new housing developments

As part of the new student caps, which are yet to pass parliament but widely expected to, the ABC understands there will be incentives for universities to provide accommodation by allowing them to exceed their allocated cap if they do so.

But while more housing is needed, building new student accommodation isn’t always a simple task, as some recent developments illustrate.

One case in point is a proposed purpose-built student accommodation building next to the University of New South Wales, in the Sydney suburb of Randwick.

The building would sit on the bustling Anzac Parade near a light rail stop and neighbouring the esteemed National Institute of Dramatic Art (NIDA).

The development was initially knocked back and met with fierce opposition by the local council and NIDA, because of concerns about construction noise, the size and design of the building and its proximity to the acting school.

“The impact of the noise and vibration during that five-year construction period is going to have such serious impacts on NIDA and their ability to operate,” Randwick councillor Philipa Veitch told the ABC.

Cr Veitch, until recently the mayor, has been one of the leading voices against the development.

She has argued it would put the viability of NIDA, which has produced some of the country’s most prominent actors, at risk.

She also said there was enough student accommodation already in the area and she would prefer if the government built public housing instead.

“We already have 3,000 of these very, very expensive rooms approved in the area and we have many already existing.”

UNSW’s chief property officer Tim Beattie acknowledged the rooms would be expensive for many students — private rooms at a similar development in Redfern are over $700 a week.

However, he argued that by accommodating those that could afford to rent there, it would free up other housing in the broader rental market.

Sydney student housing approved but opposition continues

After changes were made to the design, including decreasing the height to 16 storeys at its tallest, the development was approved last month.

Cr Veitch said NIDA “don’t feel that their demands have been met, and that their needs are being considered … in terms of the noise issue, and the setback, the impacts just on the light and so on, it’s going to have really severe impacts on their amenity”.

“NIDA is not only the leading dramatic arts institution in Australia, it’s actually one of the world’s leading acting institutions.”

NIDA and Randwick City Council are believed to be taking legal advice on whether to launch a court challenge to fight the development.

NIDA did not wish to comment on the record for this story, but directed the ABC to a letter previously published by its CEO.

Mr Beattie contended that the University has negotiated fairly with all parties and was confident the new design will be palatable to its neighbours.

“I think all of us are affected or resistant to change and this community is no different to that.

“I think you need to look at that against the backdrop of the overall growth that’s going on in Sydney — the infrastructure is here, the tram’s right outside,” he said.

Ms Brown, from the Student Accommodation Council, pointed to cases like this as an example of how slow and difficult it can be to get new housing developments off the ground.

“It’s really frustrating when local government stands in the way of bringing accommodation quickly to market, and the alternative is that we have more international students living in the residential market.”