International Education Helps Australia from Recession

Australia’s economy has faced plenty of turbulence since the pandemic: inflation shocks, housing shortages, and migration policy uncertainty. Yet, one sector has quietly acted as a stabiliser, international education.

Worth nearly $50 billion in exports, the international student industry is now the nation’s fourth-largest export, fueling GDP, jobs, and investment. According to the Reserve Bank of Australia’s latest Quarterly Bulletin, students have boosted consumption, labour supply, and net migration while being unfairly blamed for rising rents and inflation.

Far from dragging the economy down, the RBA suggests international students have been an essential buffer against recessionary pressures. They bring savings, spend strongly upon arrival, contribute to the workforce, and create demand that supports growth in multiple sectors.

The RBA acknowledges that international student numbers have surged since Australia reopened its borders in late 2021, however, their contribution to rental price growth was relatively small. Much of the sharp increase in rents occurred before borders even reopened, driven instead by broader supply shortages, population shifts, and historically low vacancy rates. As the RBA puts it, an additional 100,000 students would likely push rental demand up by about 50,000 individuals, which translates to roughly a 0.5% rise in rents, hardly the driving force behind the rental crisis.

Benefits of international education

• Consumption: Students bring substantial upfront savings, often higher than what local households have on hand. This means their spending is strong when they first arrive, particularly on accommodation, food, transport, and furniture.
  
• Labour Market: International students make up the second-largest group of temporary visa holders with work rights. However, new visa rules are reducing that labour market impact.
  
• Housing Supply: While student demand adds pressure in inner-city rental markets, it also spurs new purpose-built student accommodation developments. 

It’s easy for policymakers and the public to look at the sheer number of international students and conclude that they’re responsible for high rents or inflation. However, the RBA’s analysis reveals that they represent merely a single aspect of a significantly larger picture. International students boost GDP, support the labour market, and strengthen cultural and trade ties. In other words: international education helps keep Australia’s economy moving forward.

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