Australia's international student sector is booming, with a record of more than 700,000 students enrolled at universities and other education facilities this year.

The growth of the sector has delivered a boost to the economy. But it has also prompted concerns about the experience of the students outside campuses, including their tendency to cluster in inner city "ghettos".

Surging numbers of foreign students, particularly from Asia, have left Australian universities with one of the highest numbers of international students in the world.

As of August, there were 708,350 students enrolled at all Australian education institutions - up 13 per cent from last year. Of these, 338,399 were enrolled at universities - up 15 per cent from last year.

The main source of foreign university students was China, which accounted for about a third of the total foreign student body. Next were India, Nepal, Malaysia, Vietnam, Pakistan, Indonesia and Hong Kong. Singapore was the 10th largest source of foreign higher education students, with 7,160 students enrolled as of August.

The boom has delivered a welcome boost for the Australian economy.

According to a recent analysis by the Australian Bureau of Statistics, the sector was worth about A$28.6 billion (S$29.8 billion) last year, including tuition fees and living expenses by students during their stays. This makes education the country's third-largest export behind iron ore and coal.

Analysts have credited the boom to the strong reputation of Australian universities, along with a slightly weaker currency and the proximity to Asia. Some have suggested that some students may be concerned about travelling to the United States or Britain in the wake of US President Donald Trump's election and the British decision to leave the European Union.

Economist Saul Eslake, a vice-chancellor's fellow at the University of Tasmania, said Australian universities did not necessarily rank as highly as top-league counterparts in the United States or Britain, but tended to be much more affordable for foreign students.

"I think what attracts students here is that an Australian tertiary education is considered to be high quality," he told The Straits Times.

"By comparison with Ivy League (schools in the United States) and Oxbridge (Oxford and Cambridge in Britain) universities that rank higher than ours, it costs a lot less."

Noting the high number of Chinese and South-east Asian students, he said: "It is probably more affordable for them. It is close and in the same time zone."

But the booming sector has prompted calls for universities and governments to do more to accommodate and plan for the large number of students, who tend to cluster in inner cities.

About two-thirds of students attend institutions in the two largest cities of Sydney and Melbourne - and many of the students have clustered in the inner city. This has added to property price pressures - sometimes causing dismay among locals - and led to concerns about some students failing to mix with locals.

An expert on the sector, Ms Julie Hare, an honorary senior fellow at the University of Melbourne, said the high concentration of students in inner city Sydney and Melbourne was "clogging infrastructure, adding to house and rental prices and causing ghettoisation in some residential areas".

"The challenge now is to ensure the boom in student numbers isn't undermined by bad experiences and lack of capacity," she wrote in an article on The Conversation website on Nov 3.

"What is needed is a real, coordinated, practical, focused and strategic oversight of this enormously important sector to ensure its reputation and financial health into the future."

A report last year prepared by the University of Technology Sydney for the city of Sydney found the well-being of international students in Sydney was "generally good". But it noted that some students were susceptible to alcohol and gambling issues as they dealt with newfound freedoms or social and study stresses.

"Although accommodation is expensive, international students consider Sydney to be a desirable place to study and live," the report found.

"Socially, international students are integrating well within their own networks. International students want to connect with local communities."

Commenting on his experience as an international student, Mr Chakx Asis Singh, a commerce student from India, said leaving home brought challenges but this was "bound to happen from where ever country or culture you come from".

"But once you get to know people... I have made a few good friends," he told SBS News.

"So I feel less homesick now than I used to be in the initial days."