Australia has attracted a very large number of international students over the past decade. This paper has analysed residential development in an inner city location to show how the interaction between the commercial property industry, local urban policy and a specific source of demand shape what have been labeled “new build” outcomes in the gentrification of inner city areas. The paper focuses on the approach that draws upon the simultaneous effects of property market circumstances, urban policy and student demand. In this approach the paper looks beyond the traditional view of labour market driven gentrification of the central city (associated with the residential choices of producer service employees) and shows that student demand has been the prominent factor. It also shows how that demand has been spatially concentrated and contributed in particular to major change in a few parts of the city. A review of policy showed that the encouragement of residential development in the city of Melbourne was substantial. The Melbourne experience differs from the outcomes in US and UK cities described in previous papers that show impacts on local housing market have been seen as negative. The consequences for Melbourne are more deep-seated, and linked to broader social attitudes.
2011 The Association of Japanese Geographers