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Record supply of new student housing as international students return

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The provider of private student accommodation is probably sighing relief. The latest numbers show a surge in international arrivals.

More than 100,000 international students have arrived since Australia reopened as a qualified visa holder in mid-December, according to preliminary estimates by the Australian Bureau of Statistics. By the way, less than 5,000 international students have arrived in the last 18 months.

In addition, the Ministry of Education estimates that 27% of all student visa holders have not yet returned to Australia.

These numbers are below the pre-blockade levels seen in early 2020, but indicate that one of Australia’s most valuable sectors is recovering.

This is good news for PBSA providers. In particular, a record number of new homes will be completed in this sector over the next two years.

According to the latest PropTrack data, approximately 17,000 beds will be delivered between 2022 and 23, with an additional 13,000 beds at various stages of the development pipeline. New South Wales and Victoria make up the majority of this supply, accounting for 70% of these new beds between them.

With the return of international students, it is important to develop and deliver more PBSAs. Prior to the pandemic, there was a chronic shortage of student housing in Australia. This has resulted in higher rent growth and higher living costs for domestic and international students compared to the housing sector.

In addition, cities like Melbourne and Sydney are re-emerging from the weaker conditions brought about by the pandemic, and rents are now starting to rise. In Perth and Brisbane, rents have already risen for more than 12 months.

Many of the international students who struggled during the pandemic are returning to Australia as more purpose-built student accommodation is completed.Photo: Getty


Australia offers many draw cards for students who wish to study abroad. Not only does Australia have five universities ranked in the top 50 in the world, our city is also ranked as one of the most livable cities in the world.

Despite these benefits, Australia’s high cost of living (including rent) acts as a deterrent for many students considering studying abroad. Given that international students make a significant contribution to our economy, this is an issue that needs to be addressed.

The high number of PBSAs planned to be developed in the next few years is good news for students as it should help curb rent growth in this sector.

Despite the short-term investor challenges posed by the pandemic, balancing can increase demand. The risk profile of many assets has changed over the last two years, making investors more cautious about the opportunities they target.

Pre-pandemic ABS data for 2019 show that international education has been a key pillar of growth, supporting 240,000 jobs and bringing more than $ 40 billion to the economy. Recovery will take some time, but this growth should recover.

PBSA has a strong long-term outlook and is expected to succeed as an established, relatively high-yielding sector, and we need to continue to drive further development.

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