Housing is a major concern for many international students. This is especially so in those countries where students are mostly dependent on the private market for their accommodation. Australia is one such country, and is one of the world's major destinations for international students. This article analyses governmental failure to address problems relating to international student housing affordability and conditions. Using theory on 'policy inaction' to frame the analysis, we draw on 20 interviews with policy stakeholders to explain the Australian government's reliance on: (1) market-based housing provision for international students, and (2) a longstanding policy preference not to provide support. Interviewees were widely critical of the lack of action to address international student housing problems and understood inaction in relation, rather than in opposition, to the dominance of market-based action in housing and higher education. However, analysis of stakeholder perspectives also illuminates how policy-making "action" benefiting some emerges as "inaction" for others left behind or overlooked by the status quo. The interview data points to the need for government to overhaul its policy framework, and in doing so, to collaborate with higher education providers in revising the market-based regulatory approach. The main implications for theory and policy are discussed.