Australia’s student accommodation sector is expected to remain resilient despite the Federal Government’s proposed cap on international student numbers, according to an expert.
Ray White Head of Research, Vanessa Rader, said the cap, which aims to limit new international enrolments to 270,000 starting next year, is unlikely to significantly impact the thriving student housing market.
“The appeal of student housing in Australia is expected to persist despite the potential cap on international student numbers,” Ms Rader said.
“This market is predominantly driven by offshore groups both developing and investing in these assets.”
Ms Rader said that while the cap represents a decrease from recent figures, it still exceeds pre-pandemic levels.
“While this represents a 6.65 per cent decrease compared to the year to May 2024 figures, it still surpasses the numbers recorded in 2023 and pre-COVID highs in 2020, which were below 250,000,” she said.
The policy aims to redistribute students across Australian institutions, potentially creating new opportunities in some areas.
“Some institutions in Victoria, NSW and the ACT may see reductions in international student numbers,” Ms Rader said.
“Other institutions, such as Charles Sturt University, University of Sunshine Coast, and Notre Dame University, are set to potentially double their intake.”
Ms Rader highlighted ongoing development in the sector.
“Seven major student housing projects are currently underway across Australia, expected to add approximately 2,200 beds to the market in the next year, primarily in Sydney and Perth,” she said.
Investment in the sector remains strong, despite lower transaction volumes.
“In the 2023/24 financial year, purpose-built student housing transactions in Australia totalled just over $700 million,” Ms Rader said.
“Cross-border buyers continue to dominate the market, keeping yields within a competitive range from sub 5 per cent in key markets up to 6.75 per cent.”
Ms Rader said that the sector’s future looks promising.
“The underlying mismatch between student-suitable housing and the growing student population will likely continue to drive interest in the student housing sector in Australia,” she said.
