Australia has announced a significant policy change aimed at managing the rising costs of home rentals, which have been exacerbated by an influx of international students and workers. Starting from 2025, the country plans to limit the number of international students to 270,000, a move designed to address the surge in rental prices attributed to record migration levels.
The announcement, made on Tuesday, is part of a broader strategy to address the challenges posed by the recent increase in international student and worker numbers. According to Reuters, the Australian government is reversing some of the COVID-19-era benefits that allowed foreign students and workers to fill jobs locally. These benefits had been implemented to address labor shortages during the pandemic when strict border controls kept overseas workers out.
Education Minister Jason Clare explained the rationale behind the new limits. “There’s about 10% more international students in our universities today than before the pandemic and about 50% more in our private vocational and training providers,” Clare stated during a press conference. “The reforms are designed to make the international student sector better and fairer, and this will set it up on a more sustainable footing going forward.”
International education represents one of Australia’s largest export industries. In the financial year 2022-2023, it contributed approximately A$36.4 billion to the economy. Despite its economic significance, the influx of international students and workers has led to increased pressure on the housing market, a situation that has become a key concern among Australian voters.
Recent polls indicate that voters are worried about the impact of high migration levels on housing affordability, making immigration a potential focal point in the upcoming election. Net immigration reached a record high in the year ending September 30, 2023, with a 60% increase to 548,800, surpassing the previous record of 518,000 for the year ending June 2023.
In response to the challenges posed by this record migration, the Australian government had previously increased its annual migration numbers in 2022. This decision was intended to help businesses recruit staff to address labor shortages exacerbated by the pandemic and the prolonged border closures. However, the substantial rise in migration, particularly from countries such as India, China, and the Philippines, has expanded the labor supply but also intensified pressure on the already strained housing market.
To address the housing crisis and control the surge in migration, the government has taken additional measures. Last month, it more than doubled the visa fees for foreign students and pledged to close loopholes in regulations that allowed them to extend their stays continuously. These actions are part of a broader effort to manage the impacts of increased migration and restore balance in the housing market.
By setting a cap on the number of international students, the Australian government aims to strike a balance between maintaining the economic benefits of the international education sector and mitigating the adverse effects on housing affordability. The reforms are expected to lead to a more sustainable approach to managing international student numbers, ensuring that the sector remains robust while addressing the pressing issue of housing availability.
As Australia moves forward with these changes, the government will continue to monitor the impact on both the economy and the housing market, making adjustments as needed to achieve a more balanced and equitable approach to immigration and international education.
