‘Like their Aussie home’: Foreign student homestays floated to ease housing crunch
Encouraging families to rent their spare rooms to international students tax-free has been raised as an option to help relieve housing stress by members of a high-level panel chaired by Education Minister Jason Clare.
The Council for International Education, which is co-convened by Labor MP Julian Hill and has input from several cabinet ministers and industry heads, is mulling the idea as a post-COVID surge in student arrivals adds to pressure on an already strained rental market.
International student Kate Phan lives with Melinda Mackay in West Pennant Hills in Sydney’s north-west.Credit: Wolter Peeters
“Let’s be clear – international students are not the cause of Australia’s housing problems,” Hill said.
“That said, we must examine all ideas to expand and better utilise housing stock. Homestay for international students used to be a much bigger thing, and it’s a terrific option for people with a spare room to consider.”
Comment has been sought from Clare’s office.
Home Affairs Department data shows there were more than 587,000 arrivals of people on student visas in the year to May 31, compared to 837,000 in 2019 before Australia closed its border during the pandemic.
The figures count the number of arrivals rather than the number of students, meaning the same visa holder could be counted entering the country multiple times. More than 520,000 student visas were granted in the year to May 31.
The return of international students to in-person classes helped drive a record net migration intake of 400,000 last financial year, which is expected to fall to 315,000 in 2023-24, and then 260,000 in 2024-25.
Home Affairs Minister Clare O’Neil in April announced a crackdown on international student work rights to ensure student visa entrants were primarily coming to Australia to study rather than fuelling a temporary, low-skilled workforce.
The federal opposition has capitalised on the migration surge by accusing the government of embarking on a covert “big Australia” policy. O’Neil has denied this and accused the Coalition of leaving all tiers of government without a way to co-ordinate housing and infrastructure needs with population changes.
The political stoush is inflamed by a housing supply crisis that is contributing to soaring rents and vacancy rates of 1.2 per cent in the June quarter, according to Core Logic, with single people occupying more than a quarter of residences. A recent Resolve Political Monitor poll for this masthead found 59 per cent of voters believed the migrant intake was too high.
International Education Association of Australia chief executive Phil Honeywood, who is also a co-convenor of the council, said accommodation had been taken on as a “key priority at both state and federal level”.
“The federal Council For International Education is currently looking at best practice examples around the country. Some of these include enhancing homestay options, negotiating streamlined planning approvals and more public-private partnerships,” Honeywood said, repeating Hill’s assertion that students were not to blame for the crunch.
Hill said homestays allowed owners to take advantage of a little-known tax break under which hosts can collect tax-free income for up to two tenants.
Melinda Mackay, who hosts two international students in her West Pennant Hills home in Sydney’s north-west, said the students she had leased rooms to had become part of her family.
“They say it’s like their Aussie home, and that’s how we want to portray it,” Mackay said.
Cris Rey, the general manager of Australian Homestay Network, of which Mackay is a part, said households leasing rooms to international students could be one avenue to help with the housing shortage “as well an opportunity to connect families and help with the current rise of living costs”.
But Anouk Darling, chief executive of student accommodation provider Scape and also a member of the council, questioned the ability of homestays to provide the scale of accommodation required. Darling instead called for regulatory solutions to allow greater investment in purpose-built student accommodation, which Hill also echoed.
She also said universities needed to play a greater role in housing students, adding “so many of them are sitting on grounds that could unlock development” after NSW Housing Minister Rose Jackson urged universities to take greater responsibility for accommodating the students they were enrolling.
SGS Economics partner Marcus Spiller said the return of international students had “undoubtedly” added pressure to the housing market, but hailed the use of purpose-built student accommodation as a high-volume “build-to-rent” solution that could be replicated in the private market.
Opposition immigration spokesman Dan Tehan said the government should not be “issuing visas like confetti” without a proper plan for where the students would live.
“Particularly when Australians can’t find a home and when they do, they are paying record-high rent,” he said.
During a National Press Club speech on higher education reforms on Wednesday, Clare said one of the ideas raised in the interim report of an expert panel reviewing the sector was a sovereign wealth fund that could go towards student housing.
When asked whether it was fair to keep welcoming international students to a country where they were paying high rent, Clare said the housing crisis was a challenge for all Australians, and suggested international education in the future could mean students completing half their degrees overseas and half here.
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