Australia Needs Urgent Action to Build More Purpose-Built Student Accommodation

Australia is facing a shortage of purpose-built student accommodation (PBSA). According to CBRE (Coldwell Banker Richard Ellis) news, 8,000 new PBSA units will be built from 2023 to 2026, which is insufficient to meet the growing demand. The demand for student accommodation has surged due to the increasing number of international students moving to Australia. However, the supply of PBSA is lagging, and there is a huge gap between supply and demand. ‍

Amber News states that Australia's education sector is the second-largest industry. Australia's international students contribute $29 billion to its economy in 2022. According to the International Student Accommodation news, by April 2023, international enrollments were only 6% lower than before COVID-19.
Furthermore, according to PBSA news, the new 8,000 planned PBSA units are insufficient. The numbers are insufficient, considering other global cities have a much larger supply of new PBSA units. According to Australia's Student Accommodation News 2023, Australia's supply issue increased with a vacancy rate of less than 2% for alternative inner-city apartments. Moreover, finding the right land is one of the biggest challenges in solving Australia's housing crisis. With rising construction costs, developers are struggling to meet the increasing demand.
As per PBSA news, more than 76,500 students in Australia live in around 200 PBSAs. Most of these buildings are currently occupied, and around one-third of the beds are rented by local students. The impact of Australia's housing crisis is not limited to the real estate market; it directly affects students' lives. Australian student accommodation rents are increasing at a CAGR of 5.5%, from $405 to $505 per week till 2023. This rising trend makes it difficult for students to find quality and affordable accommodation, particularly in inner-city neighborhoods.

Governments have supported Built to Rent (BTR) developments as part of the housing mix, and governments must view PBSAs similarly. "PBSA is a separate asset class; governments must provide clear planning approval pathways." Moreover, the government should consider extending the generous land tax and regulatory treatment afforded to BTR developments.

Adina Cirson,  Australia Student Accommodation Council executive, believes "more land releases should be set aside specifically for student housing". She also states that, unlike BTR, PBSA is a scaled and mature industry. In addition, if the constraints are removed, PBSA can quickly meet the demand and fill the gaps.

Despite the current housing shortage crisis, Australia's student housing market offers students some of the best PBSA options. Look at some of Australia's best PBSA options on amber, and don't miss out on the chance to stay at some of the most excellent stays. Australia's student housing crisis requires urgent attention and action to provide affordable and suitable accommodation. Australia's increasing demand for education and a lack of affordable student housing options have placed this issue at the top of government and education stakeholders' agendas. However, the government and developers are working to solve the issue.