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Purpose-built accommodation rising to meet student housing demand

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While the introduction of a cap on the number of international students in Australia is not due to take effect until 2025, evidence is emerging that some potential students are already choosing other destinations.

The business currently manages 30 rooming houses, plus two multi-storey student accommodation buildings that offer a range of living options tailored to the diverse needs of students and young professionals. RoomingKos

According to the Student Visa and Temporary Graduate Visa Program report from the Department of Home Affairs, there was a 31 per cent decline in student visa approvals in the second half of 2023, with only 195,934 visas granted compared to 283,940 for the same period in 2022.

Research conducted by IDP Education, Australia’s largest listed international education provider, further highlights this trend. IDP surveyed 6000 prospective and current students from various global markets, revealing that nearly two-thirds of respondents indicated they would change their destination of choice due to post-study visa access rules.

RoomingKos founders Julian, standing, and Nathan Djung. RoomingKos

IDP Connect CEO Simon Emmett says 66 per cent of international students are now considering alternative countries due to the policy changes on the horizon. Additionally, 58 per cent cited lower personal savings requirements and 57 per cent pointed to cheaper visa processing fees as major factors influencing their decision.

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“The long-term drivers in international education remain strong, but we can see the impact policy changes are having on Australia, Canada and the UK, who are now behind the US for perceptions of quality, value for money and graduate employment opportunities,” he told the Australian Financial Review.

Student housing demand holds up

The impact this will have on university revenue and the broader economy is one issue, but the drop in numbers has also posed questions for Australia’s tight housing market. Nevertheless, student demand for accommodation options remains strong.

According to accommodation platform Amber’s Australia Student Accommodation Annual Report, private accommodation takes the biggest share, with nearly 70.3 per cent of students choosing this option. On-campus housing serves 3.2 per cent of students, and purpose-built student accommodation (PBSA) accounts for 6.4 per cent of the market (up from 5 per cent in 2021).

One PBSA provider, RoomingKos, which was founded in 2022 by brothers Julian and Nathan Djung, has already seen rapid expansion, with plans for future growth to meet the continuing demand.

Coming soon: Spire, the flagship development of RoomingKos due for completion in late 2025, features 125 studio apartments and is directly across from Monash University’s Caulfield Campus, in Melbourne. RoomingKos

The business currently manages 30 rooming houses, plus two multi-storey student accommodation buildings that offer a range of living options tailored to the diverse needs of students and young professionals.

Julian Djung says he is optimistic about the resilience of the sector and the opportunities for growth, regardless of any caps being imposed on international student numbers.

“Whether the caps are implemented or not, the situation remains sustainable,” he says. “If you look at Monash Clayton Campus as an example, they have about 10,000 enrolments every year just from international students, but only 3000 on-campus residences available – it means only one in three students can actually rent on campus, creating a need for alternative housing options, which is severely undersupplied.”

RoomingKos has seen a growth trajectory of 250 per cent (CAGR) over the past three years, earning it a place on this year’s AFR Fast Starters List. This success also led the company to be shortlisted in the Australian Young Entrepreneurs list for 2024, validating their approach of prioritising student wellbeing as a viable business model.

“We are known for offering student accommodation with a difference,” says Djung. “A major focus for us is resident wellbeing. Many of these students are just 18 years old, in a new country, and may experience anxiety, depression, or find it hard to make friends,” he says.

Student accommodation more than just a roof over their head

Students benefit from a comprehensive support system, which goes beyond just offering a place to live. Access to a registered nurse, wellbeing officers and regular community events are all part of the package for occupants of the fully furnished rooms and studio apartments, which are located near universities across Melbourne.

“Their wellbeing matters to us, and I think this really sets us apart from traditional rental options; our accommodations are designed with student support and community in mind and it’s why many parents choose us,” Djung explains.

Above all, Djung says the company is hoping to provide people with an experience that will make their time as a student in Australia as positive as possible.

“We are providing a place for people to actually live – it’s not something that we take lightly,” he says. “We want to show people that living in Australia as a student or even a young working professional is accessible, safe and affordable.

“With that in mind, we’re moving full steam ahead. We’re excited to announce the upcoming launch of Spire, our flagship development featuring 125 state-of-the-art studio apartments directly across from Monash University’s Caulfield Campus, which is scheduled for completion in the second half of 2025.

“We are confident in maintaining our occupancy rates of 97-98 per cent over the next few years, and we have clients actively building new properties. I believe the sector remains very strong.”

To learn more, visit https://roomingkos.com.au/ 

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    Original URL: https://www.afr.com/work-and-careers/education/purpose-built-accommodation-rising-to-meet-student-housing-demand-20241114-p5kqjr