How much student accommodation is being built in Australia?
With more than a million full-time university students, more beds will be needed.
Australian universities may be slowly slipping out of the global top 100, but there's still plenty of demand for tertiary education. A Knight Frank study of the market for purpose-built student housing in Australia shows that the sector is continuing to grow.
In 2015, there were 1,000,373 full-time university students in Australia, up 2.9% from the year before. Of those, 308,704 are overseas students, making up 31% of the total number. For Australian universities, overseas students are a crucial source of funding, since they pay full fees.
They're also the key target for purpose-built student accommodation (PBSA): typically converted office blocks offering studio-style accommodation close to campuses. While Australian students can also live in such accommodation, many will instead choose to live at home, share a house with other students, or perhaps hang out in an investment property owned by their parents.
Knight Frank's analysis suggests there are 92,070 PBSA beds in facilities across Australia, with the majority in the east coast capital cities. That number went up by 5,611 in 2015, but the number of overseas students rose by 16,050, suggesting that there is quite a lot of unmet demand for this kind of accommodation, even before you factor in potential Australian student residents and those overseas students who choose somewhere else to live.
Will the situation improve? Knight Frank projects that by the end of 2019, an additional 28,517 beds will become available, presuming all currently announced and planned projects are completed (and that takes a while; you can't construct a 400+-room in a screaming hurry).
Presuming student numbers keep growing at the same rate, that won't cover the likely demand. For investors, that's a potential area of interest. For students, it's a fresh challenge.
Evidence consistently suggests that university graduates earn more, especially if they choose the right course. Getting there, though, requires you to finish university and keep a roof over your head, and that's going to be trickier in the years to come.
Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears Monday through Friday on finder.com.au.