SYDNEY — Australia will raise its cap on foreign students by 9 per cent to 295,000 next year and prioritise applicants from South-east Asia, the government said today.

Limits on places were announced last year as a way to rein in record migration that had contributed to a surge in housing prices, with 270,000 places made available for 2025.

An additional 25,000 places were being granted in 2026 as the policy was successfully bringing down “out of control” international student numbers, the government said.

“This is about making sure international education grows in a way that supports students, universities and the national interest,” Education Minister Jason Clare said in a statement.

Australia granted nearly 600,000 student visas in the 2023 financial year, as international students returned to the country in record numbers following Covid-19.

Australia’s largest cohorts of students come from China and India.

As well as introducing the cap on numbers, the government also more than doubled the visa fee for foreign students in 2024 and pledged to close loopholes in rules that allowed them to continuously extend their stay.

The government’s measures to curb migration were “bearing fruit” and allowed for a modest increase in the cap in 2026, International Education Assistant Minister Julian Hill said.

“The numbers were growing out of control,” Hill told national broadcaster ABC.

“The government has taken tough decisions over the last 12 months, not always loved by the sector, to get the numbers down and get them to a more sustainable footing.”

Roughly two-thirds of places will be allocated to universities and one-third to the vocational skills training sector.

Larger, public universities would need to demonstrate domestic and international students had “access to safe and secure housing” and recruit more students from South-east Asia to increase their individual allocations, the government said.