A new report from the Reserve Bank of Australia (RBA) has underscored the critical role international students play in the nation’s economic and social fabric. Released in the July 2025 edition of the RBA Bulletin, the article “International Students and the Australian Economy” highlights how students from overseas have supported Australia’s economic recovery and remain a key pillar of long-term growth.
According to the report, international education generated approximately $29 billion in export income in 2023—more than three times higher than in 2021, when the sector was still reeling from the impacts of COVID-19 border closures. While student arrivals are yet to return to their pre-pandemic peak, the RBA notes that enrolments have continued to recover steadily since late 2021 and are once again a major contributor to Australia’s service exports.
International students currently make up around 4% of the Australian population and 15% of all tertiary education enrolments. Their presence is most concentrated in major capital cities—particularly Sydney and Melbourne—which together account for roughly 60% of all international student activity.
Beyond their impact on education providers, international students inject significant spending into the broader economy. From groceries and rent to public transport and leisure, their daily consumption helps support local jobs in hospitality, retail, real estate, and beyond. The RBA highlights that this economic activity benefits not only urban centres but also regional areas with growing international education offerings.
In terms of housing, international students contribute to the demand for rental accommodation, especially in high-density suburbs near major universities. While this demand has been linked to increased competition for housing in cities such as Melbourne, Sydney and Brisbane, the RBA is clear that students are not the sole or even primary driver of Australia’s housing affordability issues. Broader challenges—including limited housing supply, population growth, and slow construction activity—are identified as more significant contributors.
The report also addresses concerns about the labour market impact of international students. It notes that most students work in part-time or casual roles across industries such as hospitality, cleaning, and aged care—areas that often face persistent labour shortages. Rather than competing directly with domestic workers, international students are more likely to fill gaps in sectors with high turnover and limited local supply. In this way, the RBA suggests their contribution is largely complementary to the Australian workforce.
Longer-term, international education also provides important diplomatic and economic benefits. Many students who study in Australia return to their home countries with strong professional and personal ties, acting as informal ambassadors for Australia. Others remain in the country, transitioning into skilled roles through post-study work visas and contributing to national priorities in industries like health, IT, and engineering.
However, the report does flag some challenges that will need to be addressed to sustain the sector’s growth. In particular, it points to the importance of ensuring sufficient student housing is available. Targeted investment in purpose-built student accommodation (PBSA), the RBA suggests, could relieve pressure on the broader rental market and improve housing outcomes for both domestic and international renters.
Torie Brown, Executive Director at the Student Accommodation Council, says, “Our research and the RBA bulletin both agree that while international student numbers do affect rental markets at the margins, they are not a primary driver of rent increases.”
“The RBA has also acknowledged that PBSA is a student-only, scalable solution that reduces pressure on the private rental market by absorbing student demand,” she said.
The report arrives amid ongoing national discussions around migration, education policy, and housing affordability. While some voices have called for caps on student visa numbers, the RBA presents a more nuanced picture—one that recognises international students as a vital and largely positive force in the Australian economy.
As Australia continues to rebuild from the disruptions of the pandemic and seeks to maintain its competitiveness on the global stage, the RBA’s analysis offers a timely reminder of the enduring value of international education. For universities, local businesses, and the broader community, international students are not just temporary visitors—they are an integral part of Australia’s economic future.
Phil Honeywood, CEO of the International Education Association of Australia (IEAA), told The Koala, “This Report comes as a timely independent verification of the crucial importance of our sector to Australia’s recent economic and our future challenges. Whilst we already know the benefits that our students provide, it’s great to have endorsement by such an important national bank authority.
“Some of the key findings include that spending by international students was an important contributor to the growth in overall consumer demand. Another highlighted that overseas students significantly contribute to the economy’s supply potential. While the business community have gradually come to accept the importance of the $50 billion pa international education sector, its even more important that the RBA’s findings are better communicated to the wider Australian community.”
The RBA Bulletin story can be seen here.
