Force universities to provide international student accommodation


Australia’s record net overseas migration boom has been driven by international students, as illustrated clearly in the next chart:

NOM breakdown

Source: Justin Fabo (Macquarie Group)

This surge in net overseas migration has roughly halved Australia’s rental listings, according to CoreLogic:

Rental listings

Source: CoreLogic


It has also driven the capital city rental vacancy rate to a record low 1.0%:

Rental vacancy rate

Source: CoreLogic

In turn, many Australian tenants have been driven into financial stress, forced to live in share housing, or pushed into homelessness.


By contrast, Australia’s universities are making out like bandits enjoying record fees from international students.

It is a classic case of the universities privatising the gains from record immigration while the costs are pushed onto Australians at large, most notably renters.

One way to solve the issue and align the interests of universities with Australian tenants is to make the universities responsible for housing their international students.


For example, the government could require that universities supply on-campus accommodation for at least 50% of their international student enrolments.

So, if universities wish to grow their international student base, then they would need to build more on-campus accommodation.

Not only would such a policy effectively place a cap on international student numbers (and therefore net overseas migration), but it would also directly relieve pressures on the private rental market: a win-win scenario.


The universities, rather than taxpayers, are also ‘clipping the ticket’ and collecting the economic rents from Australia’s immigration system via student fees.

Australian universities are non-profit organisations and currently do not pay tax (unlike other ‘export’ industries). This is despite universities acting like corporatised, profit-maximising businesses.

The federal government should, therefore, levy universities for each international student that enrolls.


Doing so would ensure that Australians receive a financial cut from the international student trade, similar to how a sovereign wealth fund collects revenue from mineral exports.

Ultimately, the whole international education system needs to be reformed to ensure that the costs and benefits to universities and Australians are aligned.

Making universities provide on-campus accommodation in proportion to the number of international students enrolled, alongside levying a charge per international students, are obvious policy solutions.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.