Call for more student accommodation as pressure mounts in private rental market

Calls are being made for more student accommodation for the “thousands” spilling out into the private rental market.

The demand for student accommodation is forcing many students into the private rental market.

Calls are being made for more student accommodation for the “thousands” spilling out into the private rental market.

The reality of the situation has been laid bare by Ray White Corporate’s head of research Vanessa Rader who says there are 422 student accommodation rooms due for completion in NSW in the next 12 months.

Meanwhile, international student numbers across the state have overtaken Victoria to more than 185,000 to July this year.

Ms Rader says there were opportunities for developers and the government across Australia to get behind student accommodation to help ease the pressures on the rental market.

“There would be thousands of students who qualify for student accommodation taking up space in the housing market,” Ms Rader said.

Ray White’s Vanessa Rader is calling for more action to increase student accommodation.

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“They are taking up housing stock that we need. It’s adding to the affordability crisis. They are being competitive with the population that really do need somewhere to live.”

Ms Rader will be part of a real estate panel on “Future Cities” at the upcoming CapTech event in Sydney which brings innovators, investors, and industry leaders together to explore growth opportunities.

The main topic Ms Rader plans to raise is the lack of student accommodation.

“When you are looking at student numbers here in Australia we are nearly back to pre-pandemic levels,” she said.

Ms Rader said since China banned foreign university online courses earlier this year, overseas student numbers had increased dramatically.

Ms Rader said students were seeking apartments in the Pyrmont and Ultimo areas. Picture: Jonathan Ng

“Chinese students didn’t come back as quickly as others because they could learn from home, however the policy changed to face-to-face study or their qualifications would not be acknowledged,” she said.

“All of a sudden we have had a huge increase in Chinese students coming back to Australia looking to recommence studies.”

She said there were “great strides” being made in student accommodation developments before Covid mainly by offshore companies.

“We acknowledged the fact we needed student accommodation pre-Covid but it just stopped with the lockdowns and approvals stopped going through,” she said.

“At the time we thought ‘that’s the end of student accommodation’. Now what we have is not meeting demands.”

Ms Rader has renewed calls for more student accommodation.

She said there had been 524,500 international student enrolments across Australia to July this year – compared to 615,000 pre Covid – with 185,370 of those in NSW.

“We will overtake the pre-Covid numbers by the time we hit next year’s enrolments,” Ms Rader said.

“It’s time for us to revisit student accommodation. We need apartments yes but there’s other areas we’ve got to push through. Student accommodation is often offshore lead, it’s seen as a sophisticated asset class.”

Scape is the leading owner/operator of student accommodation across Australia, with 13 locations across Sydney and more in the wings.

Scape’s chief executive officer Anouk Darling said the company was seeing demand across three areas.

Scape’s chief executive officer Anouk Darling.

“We’re seeing a strong demand from existing residents wishing to renew their lease, earlier applications than usual and universities seeking to secure bookings for the incoming cohort which is proving to be more challenging given the increase in interest,” she said.

“We have had waiting lists across all our assets, the majority in Sydney. We’ve seen increases in not just international students but domestic, more wanting to flee the nest and have the college experience.”

Ms Darling said Australia was among the top global destinations for education.

“Our strong post study visas, great education and beautiful locations make for an exceptional educational and personal development experience,” she said.

A communal student room at the Scape international student housing accommodation in Redfern, Sydney. Picture: Bianca De Marchi

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She said Scape had a dedicated leasing team committed to finding the best locations, with students voicing concerns in a variety of areas such finding properties close to campus at an affordable rate and costs of living. They find Scape appealing due to inclusions such as Wi-Fi, bills, events etc.

Ms Darling said Scape had another 10 assets in development – a majority in NSW – over the next three years, one in Sydney in the first half of 2024.

Ms Rader said it was increasingly difficult for students to find spots in purpose built accommodation, forcing them to seek out apartments in the Ultimo and Pyrmont areas that could be leased by couples or young families.

“Prices have gone up, vacancy is nothing so students have to go out to the residential market,” she said.

“This is an issue today which is all well and good. But how long is it going to take to fix?

“If you had these people in purpose built accommodation, it would free up that space.

“Our building stock is so low and there’s a pent up demand that’s not going to be satisfied any time soon. We are in this cycle and we are not building quick enough.”

Originally published as Call for more student accommodation as pressure mounts in private rental market