The Ambition to Double International Education Revenue

New Zealand's higher education sector is poised for significant growth in international student enrolments, driven by government ambitions to nearly double the economic contribution from this vital export industry. The Tertiary Education Strategy 2025-2030 and the International Education Going for Growth Plan outline targets to increase student numbers from 83,400 in 2024 to 119,000 by 2034, boosting revenue from around $4.5 billion to $7.2 billion annually. This moderate expansion in headcount—still below the 2016 peak of 131,800—focuses on attracting higher-value students to postgraduate programs like master's degrees, which have already surged to 185% of pre-pandemic levels.

Universities across New Zealand, including Auckland University of Technology (AUT), play a central role in this vision. AUT, one of the country's largest institutions with over 25,000 students, already hosts around 11,000 international learners from more than 100 countries. This growth promises economic benefits, innovation, and cultural exchange but raises critical questions about the sector's readiness.

Current Enrolment Trends and Recovery Post-Pandemic

International student numbers have rebounded strongly, with 85,535 enrolments from January to August 2025—a 14% increase year-on-year and surpassing full-year 2024 figures of 83,425. Universities lead this recovery, enrolling 36,045 students in the first eight months of 2025, up 15%. Key source markets include China (34%), India (14%), Japan (9%), and others like South Korea and the Philippines.

At AUT, international students contribute significantly to its diverse cohort, supporting programs in technology, health, and business. Overall satisfaction remains high, with 87% of new arrivals rating their experience positively in 2025 surveys, particularly praising connections made (92%) and education quality (90%). This upward trend, from 86% in 2024, underscores New Zealand's appeal despite global competition.

However, this surge amplifies pressures on university resources, prompting debates on sustainable scaling.

Government Strategy and Policy Shifts

The refreshed New Zealand International Education Strategy 2022-2030, alongside the 2025 Going for Growth Plan, emphasizes high-value, sustainable education. Key changes include extending in-study work rights from 20 to 25 hours per week for eligible visa holders starting November 2025, aiding affordability amid rising living costs. Post-study work visas are also under review to retain talent.

These policies align with broader economic goals, positioning universities as engines of growth. Yet, the India-New Zealand Free Trade Agreement, finalized in December 2025, limits caps on Indian student visas, adding complexity to managing inflows.

AUT's Perspective on Expansion Feasibility

AUT has actively engaged in the discourse, publishing analysis questioning unchecked growth. PhD candidate Cristóbal Castro Barrientos from AUT's NZ Policy Research Institute argues the targets are achievable below historical peaks but require safeguards. He highlights the need for housing monitoring, market diversification, and employment tracking to avoid pitfalls seen in Australia and Canada, where rapid expansion led to caps and backlash.

AUT's leadership emphasizes investing in quality programs and student support, with its international prospectus detailing comprehensive services from application to graduation. As a fast-growing postgraduate hub, AUT exemplifies the shift toward higher-fee, research-intensive enrolments essential for revenue goals.

Housing Pressures in University Towns

Housing emerges as the foremost challenge, with university towns like Auckland, Dunedin, Wellington, and Christchurch already strained. In Dunedin, median weekly rents rose 12% in mid-2025 despite more listings, signaling demand exceeding supply. International students, often in shared or substandard rentals, face New Zealand's notorious issues with cold, damp, and poorly insulated homes, impacting health and academic performance.

Projected growth could add tens of thousands more students, exacerbating shortages. Universities are expanding on-campus halls, but private markets lag. For context, one bed per international student would require substantial new builds, clashing with domestic affordability crises.

• Auckland: Central locations see rents 20-30% above national averages.
• Dunedin: Student influx drives seasonal spikes.
• Wellington/Christchurch: Similar patterns with transport dependencies.

Solutions include public-private partnerships for purpose-built student accommodation (PBSA) and rental market monitoring with intervention triggers.

Photo by Don T on Unsplash

Infrastructure and Capacity Constraints

Beyond housing, universities grapple with infrastructure limits: lecture theaters, labs, libraries, and transport. AUT and peers have invested in facilities, but scaling to 119,000 students demands coordinated investment. Public transport in Auckland, home to AUT and University of Auckland, strains during peaks, while regional unis like Otago face isolation challenges.

Local governments must align zoning and infrastructure plans with central targets. The Tertiary Education Commission (TEC) monitors via annual reports, but gaps persist in real-time capacity data.Read AUT's full analysis.

Workforce Shortages and Quality Assurance

Growth strains academic and support staff. Past declines led to 700 university job losses; rebounding numbers risk burnout without recruitment. Domestic funding cuts—$45 million from research in Budget 2025, no new Endeavour grants in 2026—increase fee reliance, pressuring quality.

Universities need more lecturers in high-demand fields like AI, health, and engineering. Immigration policies prioritize skilled migrants with tertiary quals, but visa backlogs hinder. Quality hinges on maintaining low student-staff ratios; diversification beyond China/India reduces risks from market shocks.

Economic Benefits and Local Impacts

International students inject $45,000 per year on average, fueling jobs in hospitality, retail, and services. At unis like AUT, they enrich research and campus life. Yet, locals cite wage suppression in entry-level roles and infrastructure overload. Transparent graduate outcomes reporting—by field and visa status—builds trust.Check higher ed jobs in NZ for opportunities amid growth.

• Benefits: $4.5B exports, innovation, cultural ties.
• Risks: Employment competition for domestics, public backlash.

Student Experiences and High Satisfaction Levels

Despite challenges, 92% value Kiwi connections, 90% praise teaching. AUT's support teams aid transitions, from visas to wellbeing. Visa reforms enhance work-life balance, but housing hunts remain stressful—proxies used for rentals in Auckland. Cultural context: Manaakitanga (hospitality) defines NZ unis, but isolation affects some.

Proposed Solutions and Safeguards

Experts like Castro advocate guardrails:

• Monitor uni-town rentals with caps if strained.
• Diversify to Europe, Southeast Asia.
• Track post-grad employment.
• Align with local councils.

Universities invest in PBSA; govt boosts TEC oversight. For students, explore scholarships and career advice.

Photo by Amos Haring on Unsplash

Future Outlook for NZ Higher Education

With careful management, NZ can sustain growth, leveraging strengths in practical, research-led programs at AUT and beyond. By 2034, balanced expansion could solidify its top-destination status. Stakeholders must prioritize sustainability.

Prospective students: Research unis via Rate My Professor, jobs at Higher Ed Jobs, advice at Career Advice, or post at University Jobs.