RBA report highlights strong supply response to student influx
The supply of purpose-built student accommodation (PBSA) has expanded to meet the increasing demand from international students, according to analysis from the Reserve Bank of Australia (RBA).
The RBA’s findings show that while international students contribute significantly to the economy, the overall housing supply has not kept pace with demand. PBSA is identified as a key sector capable of delivering large-scale student housing.
The central bank highlighted that “higher international student numbers have generated a supply response” in the PBSA sector, with a notable rise in project approvals and industry projections indicating further growth.
“More than most housing types, PBSA developments can deliver hundreds of student-only beds in a single project,” said Torie Brown, executive director at the Student Accommodation Council. “A typical new PBSA building adds around 700 beds to the market, easing pressure on inner-city rentals and freeing up homes for other renters.
“This makes PBSA one of the most efficient and scalable ways to meet the housing needs of international students. It should be treated as a priority asset class by all levels of government, supported through planning systems, supportive rental legislation and investment frameworks.”
The RBA also stated that “the rise in international student numbers is likely to have accounted for only a small share of the rise in rents since the onset of the pandemic.” Despite this, international students have often been blamed for rising rental prices, even though rents increased during the pandemic when international student arrivals fell sharply.
A report released last year by the Student Accommodation Council indicated that capping international student numbers at 270,000 would have minimal impact on average metropolitan rents – about $5 per week – while costing the economy an estimated $4.1 billion annually.
Another report found that PBSA development has closely tracked the growth in international student enrolments, with student numbers rising 75% since 2015 and private PBSA beds increasing by 74% over the same period.
“We would be better off focussing on increasing the supply of PBSA, which has already demonstrated an extraordinary ability to match the demand from international students,” Brown said.
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