There is no doubt it’s a good time to be in purpose-built student accommodation (PBSA).
Tight rental markets coupled with the return of international students at rates 150 per cent higher than 2022 has buildings at capacity in most capital cities. After weathering two years of border closures and lockdowns, student accommodation is finally full and bubbling again.
The perfect storm that has engulfed the housing sector at every level has also turned the spotlight on the under-supply of student accommodation – an asset class that actively removes students from competing in the private rental market and underpins our largest service export.
But governments at every level Australia wide are actively making it harder rather than easier for capital to flow into this desperately needed asset class.
Last week, President of the Student Accommodation Council Anouk Darling and myself briefed a Federal Government Inquiry into the international education sector. While the inquiry was broadly about how international students have been fairing in Australia since Covid, the interest in where and how students are finding housing was an acute focus.
We informed the parliamentarians about the patchwork of taxes and charges levied in every state and territory, about the multitude of different definitions applied to the sector Australia wide, and about the damaging foreign investor surcharges that are a huge disincentive for an asset class underpinned nearly entirely by international capital.
The committee was shocked to hear that Australian super funds invest in PBSA overseas, but not in their own backyard.
Investors want to grow the supply, and governments should make this as simple as possible.
If we are to unlock supply and fully achieve a purpose-built student accommodation renaissance, governments need to work with the sector to untangle the raft of barriers that stand in the way of housing our students.
International capital is agnostic, and we are currently in a global race with Canada, the UK and the US. Let’s elevate Australia’s place in this global market and make our PBSA sector the most attractive place to invest in the world. Our students, our broader rental market and our international education sector will be the ultimate beneficiaries.
Home Property Australia The student accommodation renaissance?