Plummeting International Student Numbers in Australia Raise Labor Shortage Fears; RBA Rate Cut Imminent
Australia is grappling with a sharp decline in international students, triggering concerns over labor market gaps. As of April 2025, the total number of international students dropped to 794,000, a decrease of 300,000 from the end of 2024. New enrollments plummeted 13% year-on-year to 219,000, while visa applications fell by over 30%. This is largely attributed to successive policy tightenings: visa fees were hiked twice in a year (from A$710 to A$1,600, then to A$2,000); English proficiency and financial proof requirements were raised; and scrutiny of the "Genuine Temporary Entrant" test was intensified.
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Labor market risks are mounting: net temporary migration fell from 531,000 in 2023 to 341,000 in 2024, with international students accounting for over 40% of this cohort. Experts from the Australian National University warn that prolonged policy tightening could lead to an economic "hard landing" and a recurrence of skill shortages in the next two years. The CEO of the International Education Association described the situation as a "boiling frog" scenario, noting that countries like France and Germany are seizing the opportunity to attract talent.
Meanwhile, the Reserve Bank of Australia (RBA) is poised to cut rates, easing mortgage pressures. Three major banks (Westpac, Commonwealth Bank, NAB) predict the RBA will slash the cash rate by 25 basis points to 3.6% on July 9, which would mark the third consecutive cut (totaling 75 basis points since February). For households, this would reduce monthly repayments by A$90 for a A$600,000 mortgage (A$273 cumulatively) and A$150 for a A$1 million loan (A$456 cumulatively). Potential homebuyers could see their borrowing capacity rise by around A$50,000. Mortgage experts note that three rate cuts will deliver "substantial relief" but may also fuel house price rebounds and intensify competition in the property market. ANZ, however, maintains its forecast for a rate cut in August.
