Policy Reversal —
From Caps to Growth

In a marked departure from earlier plans, the Australian government has increased the cap on international student placements from 270,000 to 295,000 for 2026—an expansion of 25,000 spots. This rise is part of a broader strategy to secure the future of Australia's international education sector, bolster its global competitiveness, and strengthen regional ties, particularly with Southeast Asia

This shift reflects the sector’s plea for stability. As Universities Australia emphasized, international students bring over A$50 billion annually to the economy and support roughly 250,000 jobs. By enabling sustainable growth, the broader cap allows the sector to build confidence and momentum.

 

What GETC Sees for Student Accommodation

Purpose-Built Student Accommodation (PBSA) Gains Momentum

Previously, any consideration of increasing student intake was tied to evidence of adequate housing capacity. Now, with the cap lifted, purpose-built student accommodation emerges as a vital underpinning of Australia's international education strategy. Institutions having compliant PBSA capacity are receiving more support.

The government’s framework underscores housing supply as a parallel priority. GETC sees this as a clear opportunity: incentivising—and in some cases requiring—universities and education providers to bolster PBSA infrastructure.

Filling Empty Beds & Freeing Up the Rental Market

Reports indicate that, at the beginning of Semester 2 2024, only 124,000 of private PBSA beds were occupied—leaving around 8,000 beds unfilled. With the new student intake, these beds can finally be utilised, redirecting demand away from the general rental market and alleviating pressure on already stretched housing supply.

Unlocking Investor Confidence for PBSA

The policy shift bolsters investor sentiment in the PBSA sector. By tying growth to housing, providers can demonstrate demand certainty. As highlighted by the Student Accommodation Council, partnerships between the federal government and states are essential to "turbo‑charge" PBSA supply by 2026.

Economic Impacts,
More Than Just Beds

Positive Economic Ripple Effects

A hypothetical freeze—or prior cap—could have cost the education sector dearly. A joint report with the Student Accommodation Council estimated that such caps could reduce GDP by A$4.1 billion annually, slash university revenues by A$600 million, and eliminate 22,000 jobs. The decision to lift the cap reverses this trajectory, safeguarding economic growth and employment.

Balancing Housing & Education Supply

Rather than suppress demand to fix housing affordability, GETC advocates for supply-side solutions. Students account for about 6% of the rental market, with nearly 40% living outside that ecosystem entirely. Thus, the increase in student numbers, paired with housing delivery, should relieve—not exacerbate—market pressures.

 

Strategic Opportunities & Forward Momentum

Regional Growth Potential

By prioritising Southeast Asian engagement and exempting certain student cohorts (e.g., those moving from TAFE to universities), this policy invites expansion beyond main metro areas. This bodes well for PBSA development in regional hubs, advancing decentralisation and investment outside Australia’s biggest cities.

Towards Sustainability & Integrity

This strategy reflects a more nuanced, sustainable approach: integrating infrastructure commitments, diplomatic goals, and sector integrity. GETC sees it as a move away from blunt caps and toward targeted, collaborative governance of international education and accommodation capacity.

 

Final Word from GETC

Australia’s decision to raise the international student cap to 295,000 offers a clear message: the nation remains open, strategic, and investment-ready in its international education approach. The student accommodation sector—especially PBSA—becomes central to this growth narrative. For providers, investors, and policymakers alike, the path now hinges on delivering tangible housing supply that aligns with student numbers and educational quality.

GETC stands ready to support industry in capitalising on this shift, advocating for supply-driven solutions that reinforce Australia’s reputation as a global education leader—while relieving pressure on housing markets and enriching communities.

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