Net Migration Overshoots Forecast by 35,000 in 2025-26

Australia's net overseas migration (NOM) for the 2025-26 financial year is now projected at 295,000, up from the government's previous estimate of 260,000. That revision represents an overshoot of 35,000 people, according to the 2025-26 Federal Budget papers released on 12 May 2026.

For 2026-27, the revised forecast is 245,000, compared with the earlier estimate of 225,000. The government projects NOM will fall to approximately 225,000 per year by the end of the decade, approaching pre-pandemic levels.

Why Are Numbers Higher Than Expected?

The Budget papers identify one primary driver: temporary visa holders are departing Australia at lower rates than previously modelled. When fewer people leave, net migration rises even without a corresponding increase in arrivals.

The papers also note that arrivals of New Zealand citizens are expected to remain strong, supported by Australia's relatively favourable labour market conditions compared with New Zealand.

For context, NOM peaked at more than 550,000 in 2022-23 as post-pandemic catch-up migration surged. The current trajectory represents a sustained decline from that peak, though the pace of that decline has been slower than forecast.

Budget Measures Designed to Apply Downward Pressure

The government has acknowledged the overshoot and outlined several measures it says will apply downward pressure on migration numbers. These are drawn directly from the Budget papers.

MeasureDetailTemporary resident property ban extendedBan on temporary migrants buying established residential property extended to 2029Permanent program restructured70% of the 185,000 permanent places allocated to skilled migrants; priority given to onshore applicantsTemporary Graduate visa charge doubledVisa application charge for the Subclass 485 visa doubled; estimated to raise $1.2 billion over five yearsWorking Holiday Maker (WHM) program reformedChanges aimed at better controlling numbers, reducing work barriers, and fairer visa allocation

What the Permanent Migration Restructure Means for Skilled Applicants

The decision to prioritise onshore applicants within the permanent program is significant. With 70 per cent of 185,000 places (approximately 129,500 places) directed to skilled migration rather than family reunion, the skilled stream becomes the dominant pathway to permanent residence.

Onshore prioritisation means applicants already holding a temporary visa in Australia may have an advantage over offshore applicants in invitation rounds and processing queues. Prospective applicants outside Australia should factor this into their planning timelines.

The Doubled 485 Visa Charge: Compliance Costs Rise for Graduates

The doubling of the Subclass 485 Temporary Graduate visa application charge is a direct cost increase for international graduates. While the Budget papers do not project a specific reduction in applicant numbers from this change, higher charges historically reduce demand at the margins, particularly among applicants weighing cost against expected return on investment in Australia.

International students currently studying in Australia should factor the revised charge into their post-study migration budgets. The exact new charge figure will be confirmed in the relevant legislative instrument.

Political Context: Migration Remains a Central Policy Debate

Immigration Minister Tony Bourke has stated publicly that the government is working to return migration to sustainable levels while avoiding damage to immigrant-dependent sectors such as aged care and agriculture.

The Opposition has proposed tighter measures, including an Australian values test, the reintroduction of temporary protection visas, and additional deportation funding. Minor parties, including One Nation, have called for a cap of 130,000 per year. The divergence in policy positions means the legislative environment around migration is subject to further change following the 2025 federal election result.

Key Takeaways

• Net overseas migration for 2025-26 is now projected at 295,000, a 35,000 upward revision from the prior estimate of 260,000.
• The primary driver is temporary visa holders departing at lower rates than modelled, not a new surge in arrivals.
• The permanent migration program cap remains at 185,000, with 70% directed to skilled migrants and priority for onshore applicants.
• The Subclass 485 visa application charge has been doubled, with an estimated $1.2 billion revenue impact over five years.
• The temporary resident ban on purchasing established property has been extended to 2029.
• NOM is forecast to decline to approximately 225,000 per year by the end of the decade.

The content of this article is intended for general informational purposes only and does not constitute legal advice. Immigration law is complex and subject to change. The information provided may not reflect the most current legal developments. For advice specific to your circumstances, please consult a registered Australian migration lawyer. For full terms governing use of this website and its content, please refer to our Website Terms and Conditions.

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