Student numbers in Australia have grown 37% in the last eight years, but purpose-built housing has not kept pace, according to Savills' World Student Housing Spotlight 2016.
Investment in the global, purpose-built student housing market has grown rapidly in the last two years, driven by record levels of investment and surging student numbers, according to the latest Savills World Student Housing Spotlight.
After a record US$14.9 billion was invested globally in student housing in 2015 - a record - it became clear that student housing is no longer a niche market, but a global asset powerhouse.
Conal Newland, Director Savills Student Accommodation said “student housing has proven itself to be a resilient asset class to date, and with its counter-cyclical fundamentals many institutional investors are turning to the sector where they can achieve strong occupancy and rental growth.”
In Australia, the market is still in its infancy, and assets are generally tightly held according to the report.
Savills research indicates more than $2 billion worth of capital will be directed into future student housing projects in Australia.
Growth in higher education enrolments has underpinned demand for student accommodation, said Newland.
“During and shortly following the GFC the sector saw a boost to student numbers as the weaker job market pushed more people into higher education,” he said.
According to the report, between the 2006/2007 and 2010/11 academic years, student enrolments increased by an average 12% in the top seven international student markets.
In Australia, total numbers are up 37% in the last eight years, driven by strong demand from foreign students.
“Australia is a popular destination for international students, particularly from Asia where China and India together supply nearly 40% of international students,” said Newland.
Australia’s supply of purpose built student housing is failing to meet demand, according to Newland.
“The imbalance is acute, with only 7% of students accommodated in purpose-built student housing,” he said.
There are only 67,700 purpose-built student housing beds in Australia's eight capital cities. All cities have housing supply of less than 12% per full-time student, except Canberra which has purpose built housing for 27.8% of the student population.
Savills suggests the development opportunities for student housing are significant.
Image: Savills.
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International students drive demand for Brisbane student digs