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The Australian Purpose-Built Student Accommodation (PBSA) market is experiencing growth driven by international student demand, structural undersupply, and investment fundamentals.
Australia's international student population reached 723,000 in early 2025, with 592,342 student visa holders recorded as of 30 June 2025. The sector experienced a 26.4% decrease in application volumes, with 427,131 student visa applications lodged during the 2024-25 financial year compared to the previous year.
The Higher Education sector shows international enrollments above pre-pandemic levels and nearly double what they were a decade ago. Temporary higher education visa holders accounted for 33.9% of net overseas migration in FY 2022-23, compared to the long-term average of 21.1%.
China remains the dominant source market with 94,567 applications (22.1% of total), followed by India with 65,642 applications (15.4%). Nepal ranks third with 37,848 applications (8.9%), while Brazil and Bangladesh contribute 15,450 (3.6%) and 14,879 (3.5%) applications respectively. These five countries collectively account for over half of all student visa applications.
Queensland's 37% enrollment rate exceeds the national average of 29%, with Brisbane and Gold Coast markets attracting international students. NSW's student-to-bed ratio of 10.9 compares to the national average of 9.0, indicating higher accommodation pressure relative to enrollment levels. Supply constraints in Sydney reflect higher demand intensity.
Victoria operates 86 facilities compared to NSW's 57, yet Western Australia commands the highest bed capacity at 3,688 beds despite operating only 13 facilities. This discrepancy reflects larger average facility sizes in WA (284 beds per facility) versus VIC (27 beds per facility).
Australia's PBSA sector has maintained a consistent development pace, with approximately 6,000 beds opened annually from 2016 to 2024. The current development pipeline stands at 35,605 beds, with 11,100 beds actively under construction. However, completions have slowed in 2024 and 2025 following higher completion volumes in previous years.
Looking ahead, completions are projected to pick up significantly in 2026 and 2027, addressing the structural undersupply that has characterized the market. Melbourne leads the pipeline with the highest level of supply, though the majority of these projects remain in the planning stage, reflecting the challenges in securing financing and progressing to construction.
The 2018-2019 completion peak of 11,000 and 10,900 beds coincided with Australia's introduction of extended post-study work rights through the Temporary Graduate visa (subclass 485) and regional campus incentives offering an additional year of work rights. Indian student enrolments increased 34% in 2019, reaching 143,999 students, as Australian institutions diversified recruitment beyond China. Institutional investors including Wee Hur and Cedar Pacific committed over $1.6 billion to PBSA development during this period.
| Property | Location | Beds | Status | Owner/Developer | Est. Completion |
|---|---|---|---|---|---|
| Scape Kingsford | 391-397A Anzac Pde, Kingsford NSW | 521 | Under Construction | SCAPE | H1 2026 |
| UniLodge Kensington | 187 Anzac Pde, Kensington NSW | - | Completed H2 2024 | UniLodge | - |
| Y Suites on Regent | 90-102 Regent St, Redfern NSW | - | Completed H1 2024 | Y Suites | - |
| Scape Leicester | 130-138 Leicester St, Carlton VIC | - | Completed H1 2024 | SCAPE | - |
Sydney's 50% cumulative growth since 2018 exceeds other major markets, reflecting the city's positioning as Australia's primary international student destination, while Melbourne and Adelaide show more moderate appreciation patterns.
Perth's 13% annual growth rate, despite lower absolute rents, reflects international student recovery and limited new supply, while Brisbane's negative growth reflects market recalibration following recent supply additions.
PBSA rents command a 13% premium compared to nearby two-bedroom apartments. Occupancy rates in Semester 2 showed a slight easing compared to Semester 1 due to fewer mid-year student commencements. Brisbane's negative growth reflects market recalibration following elevated vacancy rates in 2024, while Perth's 13% growth reflects undersupply dynamics.
| City | Range (AUD/week) | Average Studio | Weekly Bed Rent (Sem 2, 2025) | Annual Growth (%) |
|---|---|---|---|---|
| Sydney | $550-$950 | $750 | $674 | +3% |
| Melbourne | $550-$650 | $600 | $502 | +2% |
| Perth | $250-$650 | $400 | $473 | +13% |
| Adelaide | $400-$550 | $450 | $412 | +6% |
| Brisbane | $400-$550 | $500 | $398 | -3% |
| Canberra | $350-$450 | $400 | - | - |
Note: Privately owned and operated PBSA
UniLodge's 33,000-bed portfolio represents 2.6x the capacity of its nearest competitor Scape, while Scape's pipeline expansion (+3,200 beds) positions it as the primary challenger.
| Operator | Beds | Facilities | Locations |
|---|---|---|---|
| UniLodge | 33,000 | 118 | Adelaide, Brisbane, Canberra, Melbourne |
| Scape | 18,700 (+3,200 pipeline) | 37 | Sydney, Melbourne, Brisbane, Adelaide |
| Iglu | 5,900 (+2,000 pipeline) | 14 | Brisbane, Melbourne, Sydney |
| Campus Living Village | 6,000 | 11 | Sydney, Melbourne, Brisbane, Perth |
| Greystar (Y Suites) | 5,600 | - | Sydney, Melbourne, Adelaide, Brisbane, Canberra |
The Living Sector captured $2.175 billion in transactions in H1 2025, representing 13% of the total $16 billion commercial property market. This positions the sector nearly on par with the Office sector, which captured 14% of the market during the same period.
In mature markets such as the US and UK, living assets account for 25-30% of institutional portfolios, compared to Australia's current allocation. Currently, $4.8 billion in Living sector assets are on the market, with capital mandates expanding.
Investment volumes declined from $3.0B in 2020 to $0.1B in 2021, then recovered to $1.8B YTD in 2025. European capital accounts for 63% of investment since 2022, followed by Asian sources at 31%.
| Property | Price (A$m) | Beds | Purchaser | Vendor | Date |
|---|---|---|---|---|---|
| Scape buys Aveo Portfolio | 3,850 | 10,000 units | Scape & South Korean National Pension Service | Brookfield Asset Management | 2025 |
| GIC - Wee Hur Portfolio | 1,600 | 5,662 | Greystar | GIC JV Wee Hur | Q2 2025 |
| Frasers Property - Fortitude Valley | 285 | 366 apartments | Barings & Aware Super | Frasers Property | Jul 2025 |
| UniLodge Park Avenue | 97 | 369 | M&G Real Estate | Invesco Australia | Q1 2025 |
| UNSW Jacaranda Hall | 85 | 233 | University of New South Wales | SC Capital Partners | Q1 2025 |
Note: The Scape-Aveo transaction represents the largest direct real estate transaction in Australia's history.
Australia's 6% penetration rate is 7.5 times lower than the UK's 45% and 4.8 times lower than the US's 29%. Germany and France show similar penetration levels at 8%.
The rebound in international student enrolments has exacerbated the demand-supply mismatch within the sector. Despite projects underway in the development pipeline, they still fall short of projected future demand.
Solutions for the supply shortage are complex, including elevated construction and labour costs, planning difficulties, limited land availability and high financing costs. Demand for student beds currently outweighs forecasted supply in major cities across Australia.
Barriers to Entry Remain High as established players leverage scale, while More Capital for University-Leased Assets flows into the sector due to long lease terms and security. Private Sector and Universities Increasing Collaboration through public-private partnerships is becoming a key trend.
Repositioning of Existing Assets, particularly office-to-PBSA conversions, is increasing. Exchange Rate Impact from AUD depreciation affects competitiveness for international investors.
Capital Deepening and Diversification continues as new mandates are scaled and institutional investors reposition portfolios. Housing demand, particularly for quality rental product, has held firm through softer economic cycles. Government recognises the role of private capital in solving affordability, creating pathways through incentives and partnerships. Execution becomes repeatable, pricing stabilises and risk premiums compress, which will increase liquidity.
Annual bed delivery is set to average ~4,400 until 2030, slightly short of historic levels. Demand for student beds currently outweighs forecasted supply in major cities across Australia, and Structural undersupply of student beds is an ongoing issue that needs to be addressed in 2025.
7,500 new PBSA completions are expected in 2027, compared to activity levels between 2024 and 2026. Perth's market performance has spurred a wave of new development applications in 2025, while Melbourne's pipeline remains in the approval phase, with projects seeking financing to progress to construction.
Genuine Student (GS) Requirement replaced the Genuine Temporary Entrant (GTE) requirement effective 23 March 2024. English Language Requirements were also increased for Student and Temporary Graduate visas, effective from the same date.
International Student Caps system is confirmed to continue in 2026, with an upwards revision. Public universities can push for higher allocations by demonstrating increased engagement with Southeast Asia or providing additional student accommodation.
Visa Hopping Restrictions were introduced from 1 July 2024, preventing Temporary Graduate, Visitor and Maritime Crew Visa holders in Australia from applying for Student or Student Guardian visas.
Western Australia published a Draft Position Statement on PBSA for industry consultation, with submissions closing 11 September 2025. South Australia amended the definition of 'student accommodation' to include self-contained dwellings, removing previous restrictions. Queensland made amendments to Planning Regulation 2017, making it easier to establish small-scale student housing as "rooming accommodation".
Tenancy Law Changes have been implemented across several states, including limits on rent increases and new prohibitions for "no grounds" evictions. In South Australia, a new PBSA-specific ground allows termination of fixed-term tenancies where students fail to renew within 30 days, effective 1 September 2025.
Unfair Contract Terms (UCT) reforms became effective since November 2023, with increased penalties requiring standard form contracts to be reviewed for fairness.
Housing Australia Future Fund (HAFF) aims to deliver new dwellings over five years from 2024, creating opportunities for mixed-use developments through partnerships with community housing providers.
Ministerial Direction 111's tiered processing priorities based on institutional enrollment caps (80% threshold) are redistributing student flows, potentially impacting PBSA demand patterns as providers approach allocation limits.
| Country | Visa Holders | % of Total | % Change from 2024 |
|---|---|---|---|
| India | 107,038 | 18.1% | -7.0% |
| China | 102,990 | 17.4% | +8.4% |
| Nepal | 57,692 | 9.7% | +1.1% |
| Philippines | 26,967 | 4.6% | -21.7% |
| Vietnam | 26,669 | 4.5% | -2.5% |
| Bangladesh | 22,592 | 3.8% | +47.4% |
| Colombia | 19,898 | 3.4% | 0.0% |
| Sri Lanka | 19,864 | 3.4% | +7.9% |
Ministerial Direction 111's Priority 1 processing (providers below 80% allocation) creates incentives for universities to manage enrollments strategically, potentially affecting PBSA demand timing as institutions approach thresholds. Regional universities with available capacity may see increased student flows, redistributing accommodation demand geographically.
| Sector | Applications Lodged | % of Total |
|---|---|---|
| Higher Education | 262,146 | 61.4% |
| Vocational Education & Training (VET) | 87,475 | 20.5% |
| ELICOS (English Language) | 30,347 | 7.1% |
| Postgraduate Research | 14,951 | 3.5% |
| Non-Award | 17,407 | 4.1% |
| Schools | 9,676 | 2.3% |
| Foreign Affairs/Defence | 5,129 | 1.2% |
Report Generated: January 2025 | Data Period: 2024-2025 | Next Update: Q3 2025