Student housing makes the grade in Australia

The post-pandemic recovery for Australia’s purpose-built student accommodation (PBSA) sector is now well advanced. Confidence is high and development activity is on the up with over 5,000 beds due to complete in FY2026.

• Rebounding international student volumes post-pandemic have underpinned a surge in demand. Combined with recent underbuilding, beds remain a scarce commodity with the penetration rate (beds per overseas student) estimated to have fallen back towards 0.25.

• The undersupply in the PBSA market sector is maintaining upwards pressure on rents, which continue to rise – our index of advertised studio rents sat 44% above the pandemic low in September 2025. However, we note the rate of rental increases is slowing as affordability constraints bite. This slowing is set to continue near term, a trend not out of step with broader inner city apartment rental markets.

• The run up in rents has supported solid total returns – averaging 11% per annum over the three years to June 2025. Alongside a firm platform for demand, this is buoying already elevated institutional investor interest.