Australia’s future outlook: Net overseas migration trends
Policy changes reshape student migration, but long-term outlook remains stable
A suite of policies impacting students was implemented over FY2025, including higher fees, tougher testing standards, and commencement caps for tertiary providers. This has contributed to a slowdown in net overseas migration (NOM), which we estimate totalled 280,000 in FY2025.
Nonetheless, the underlying environment for overseas students is favourable. Currency settings are advantageous, there are uncertainties in competing student markets globally, and work rights are stronger than they were pre-pandemic. The latest demographic data suggests a flattening in arrival volumes, with study visa applications made outside of Australia up 3% y/y in Q2 2025. There have been further policy adjustments since July, most notably an increase in the student cap to 295,000 (+25,000), which we see providing some modest room for growth.
Despite this, NOM is expected to decrease further, reaching a low of 215,000 persons in FY2027, slowing population growth to 1.15%. It is not until FY2029 that we forecast a return to a steady level of 250,000 per annum. This represents a cumulative upgrade of 25,000 persons from our April update.
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