The battle lines are drawn as rival developers scramble to cash in on the latest lucrative action in inner-city commercial property – student accommodation.
Finding somewhere to live for the growing number of international students entering the country has reached crisis point, with a major supply shortage resulting in rents surging up to 50 per cent.
Student accommodation specialist Scape has development applications to construct buildings on key opportunity sites in Sydney’s Kensington and Kingsford. Credit:
Commercial real estate firm CBRE says even rents for tiny, purpose-built studio accommodation has hit more than $500 a week in Sydney, Melbourne and Brisbane.
The number of international students studying in Australia hit 725,000 for the January-August 2023 period – up 31 per cent on the same period last year, according the Department of Education. More than 216,000 are located in New South Wales and 170,000 in Victoria.
There is chronic low supply of purpose-built student beds, particularly in inner-city areas, where major universities are located, and property investors are moving in to take advantage of strong investment returns that often exceed other sectors of the market.
Students are being forced out of purpose-built lodgings by the rising rents, often seeking cheaper share house accommodation. However, with vacancy rates at a record low, there they are competing with a growing number of families looking for rentals who can no longer afford to buy, after the fastest and largest interest rate increase cycle on record.
Josh Rutman, JLL head of capital markets Victoria, said developer appetite for student accommodation sites is quickly ramping up.
“There was a 29 per cent rise in Melbourne student numbers in 2023 and demand for student housing is expected to continue to grow strongly in coming years,” Rutman said.
“Despite the rising number of beds expected to be delivered in the next three years, there is still ample opportunity for new developments.”
Rent surge sparks investor stampede into student accommodation
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18.11.2023
The battle lines are drawn as rival developers scramble to cash in on the latest lucrative action in inner-city commercial property – student accommodation.
Finding somewhere to live for the growing number of international students entering the country has reached crisis point, with a major supply shortage resulting in rents surging up to 50 per cent.
Student accommodation specialist Scape has development applications to construct buildings on key opportunity sites in Sydney’s Kensington and........
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