Australia announced on Tuesday that it would cap the number of international student enrollments at 270,000 for 2025. This move comes as the government aims to manage record migration levels that have contributed to a sharp increase in home rental prices. This decision follows various measures taken since last year to phase out COVID-era concessions for foreign students and workers, which were initially introduced to help local businesses fill workforce gaps while strict border controls kept overseas workers out.

Education Minister Jason Clare highlighted that there are currently about 10% more international students in Australian universities compared to pre-pandemic levels, with a 50% increase in private vocational and training providers. Clare stated that these reforms are intended to make the international student sector more sustainable and fairer for the future.

International education remains one of Australia’s largest export industries, contributing AUD 36.4 billion ($24.7 billion) to the economy in the 2022-2023 financial year. However, public concern has grown over the large influx of foreign students and workers, which many believe has intensified pressure on the housing market. With an election less than a year away, immigration is expected to be a significant issue.

Net immigration reached a record high in the year ending September 30, 2023, surging 60% to 548,800 people, surpassing the 518,000 recorded in the year ending June 2023. The increase in migration, largely driven by students from India, China, and the Philippines, has expanded the labor supply and curbed wage pressures but worsened the already tight housing market.

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In response, the Australian government has taken steps to curb the migration surge, including more than doubling the visa fee for foreign students and closing loopholes that allowed them to extend their stay indefinitely.