Australia’s deepening rental crisis is not only a domestic challenge – it is now eroding the nation’s reputation abroad.
As the country actively recruits skilled migrants, students, and workers through international education and migration programs, many newcomers are finding the housing market far from welcoming, according to Lowy Institute.
“Enthusiastic, full of hope, with postgraduate degrees, international work experience, and legal working rights, I arrived in Melbourne about six months ago. But when it came to renting a home, a very basic amenity, none of that mattered,” one recent migrant said.
Despite Australia’s image as one of the world’s most liveable and inclusive nations, migrants say they are being locked out of the rental market by opaque and often discriminatory processes.
“Landlords didn’t care for my qualifications or potential. They wanted an Australian credit history, a stable job, and sometimes even months of rent in advance. Without these, I was a risk, not a tenant,” one migrant said.
The result, many argue, is more than just individual inconvenience – it’s systemic exclusion that directly undermines Australia’s soft power.
While policy discussions often focus on homeownership and housing supply pipelines, the rental market has become the true battleground for migrants and young workers, Lowy Institute reported.
For those arriving with no Australian credit history, no local job references, and limited savings, finding housing is often the first and most stressful hurdle.
“Australia’s rental crisis is more than a local issue, it is a reputational risk, one that affects the country’s image as an inclusive and fair society,” said Sohail Akhtar, author, academic and policy researcher.
The sharp post-pandemic inflationary spike has changed the rental landscape dramatically.
Before COVID-19, rents were high but relatively stable. Since then, conditions have worsened across advanced economies – and Australia is no exception.
Rental inflation is now eight times higher than in the late 2010s, with median rents in Melbourne and Sydney jumping more than 30% in just two years. These increases far exceed both inflation and wage growth. Vacancy rates in many areas have dipped below 1%, intensifying competition, Lowy Institute reported.
“Vacancy rates have fallen below 1% in many areas, triggering rent bidding wars that disproportionately affect those without local networks or financial buffers,” Akhtar said.
PropTrack data also showed the median national advertised rent rose to $630 a week in the March quarter, while rental demand continues to outstrip supply.
Even when housing is technically available, migrants report being shut out of opaque selection processes.
“Newcomers are routinely overlooked because they can’t present long-term employment contracts, local references, or upfront payments that wealthier applicants can afford,” Akhtar said.
And once they do find housing, many are subject to fixed-term contracts where landlords raise rents after delays – meaning rental inflation lags behind the official CPI figures.
This exclusion has real and lasting impacts. Migrants recount experiences of precarity, homelessness, and humiliation – often just weeks after arrival.
“Rental properties occupied by international students in a non-pandemic year are estimated to amount to about 7%, yet foreigners and migrants were blamed over the past year in the lead up to the recent election for inflating the Australian housing market,” Akhtar said.
These negative experiences, shared on social media and global networks, are damaging Australia’s international image. Soft power – built through diplomacy, education, and cultural reputation – is being undercut by on-the-ground realities.
“The cost of a visa might be paid up front, but the emotional, social, and financial cost becomes clear only after arrival,” Akhtar said.
The core of Australia’s brand abroad is the promise of opportunity, safety, and inclusion. But when housing becomes a barrier rather than a foundation, the country’s international appeal suffers.
“This is not just a housing policy failure. It is a reputational one,” Akhtar said.
“Australia’s reputation abroad rests on the lived experiences of those who come here seeking a better life, not on ads or migration brochures. That experience is not welcoming right now.”
Akhtar said that the issue must be addressed If Australia wants to maintain its inclusive reputation.
“To maintain its standing as a fair, forward-thinking nation, housing must be treated as a basic amenity, not a privilege of those already established,” Akhtar said.
