The federal government will require public universities to prove they’re creating additional student housing if they want to increase their international student intake in 2026—a move aimed at reducing pressure on Australia’s tight rental market.
The cap for international student places has been lifted by 25,000 to 295,000 for 2026, but the increase comes with a condition: universities must demonstrate they are providing enough housing to support both domestic and international students.
Education Minister Jason Clare said the new approach is intended to ensure growth in international education aligns with national interests, realestate.com.au reported.
“The new planning level gives the sector certainty to continue delivering a high-quality educational experience to international students, while addressing national priorities,” Clare said.
The rule change follows heated debate over population growth and housing availability, with international students often caught in the political spotlight since Australia reopened its borders in 2022.
While rental price growth has eased from 2022–2023 peaks, national rents were still 5% higher year-on-year in March 2025, according to PropTrack.
REA Group economist Angus Moore (pictured) said supply remains the core issue.
“Fundamentally, the reason we’re facing such challenging conditions in rental markets comes down to not having enough rentals,” Moore said. “Solving that over the long-term in a sustainable way comes down to building more rentals, and additional student accommodation will help.”
The move has been welcomed by student housing providers, who have long called for more collaboration between universities and the accommodation sector.
“Requiring universities to demonstrate their commitment to providing housing for students to grow their enrolments is a sensible and necessary step, and one that aligns with our calls for more collaboration between the higher education and student accommodation sector,” said Torie Brown, executive director of the Student Accommodation Council.
According to March research, there are about 100,000 purpose-built student accommodation beds across the country, with an additional 35,605 in the pipeline. Yet many overseas students also rely on the private rental market, increasing competition for homes.
The federal government faced scrutiny after net overseas migration peaked at over 550,000 during the year to September 2023. New ABS data shows migration has slowed to around 340,000 in the year to December 2024, but housing concerns remain front and centre.
While the government’s new plan ties enrolment growth to housing provision, critics argue the broader planning process remains unclear.
“The Albanese government is continuing to operate an opaque planning system for international education and needs to give all tertiary providers clarity on how it arrived at these numbers while ensuring that there are no losers,” said Shadow Education Minister Jonno Duniam.
As part of the new framework, universities will also be expected to increase engagement with Southeast Asia as they expand their international student numbers.
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