Australia is currently witnessing a substantial upswing in the enrollment of international students, with a total of 613,217 students as of March 2023, marking a 27% increase from the previous year. This surge in global demand for education has created an urgent need for affordable and high-quality student accommodation.
According to the “Beyond Beds: Decoding Australia’s Student Housing Market” report by University Living, the estimated value of Australia’s student housing market is AUD 10 billion, accompanied by an impressive compound annual growth rate (CAGR) of 17%. This expansion has led to a 10-20% increase in rental costs in major cities, contributing to the ongoing housing predicament. Notably, the health and education sector is Australia’s second-largest industry, constituting 13% of the country’s overall output.
It is pertinent to highlight that only 10% of the market comprises on-campus accommodation, while the remaining 90% constitutes off-campus options. The total university enrollment to study in Australia stands at around 1,550,000 students, encompassing both domestic and international students.
What led to an increase in the housing demands?
The escalating demand for housing is primarily attributed to the rise in international student enrollment, accounting for nearly 76% of the student housing market in 2023. Indian students constitute 17% of the international student body, ranking second only to China, which represents 22% of the international student population. In 2023, India’s international student enrollment increased by 28%, while China experienced a 4% decline.
According to the report’s estimates, Australia has over 60,000 beds across 42 universities, managed by university and corporate entities. Key players in purpose-built student accommodation (PBSA), alongside smaller regional entities, manage approximately 90,000 beds. Of these PBSA beds, 26% are occupied by domestic students, with the remainder utilized by international students. Additionally, private rentals and homestays, constituting an unorganized market, offer around 360,000 and 100,000 beds, respectively.
Also read: Can you study in Australia without IELTS?
City-wise break-down of student housing in Australia
Breaking down the student housing scenario by cities, Sydney, Melbourne, and Brisbane dominate the market share with a combined 79% share of the 400,000 available beds. Sydney’s occupancy rates have reached an unprecedented 98%, accompanied by a 10% increase in rental rates over the past year. Similarly, Brisbane and Melbourne report occupancy rates of 96% and 97%, with rental rates increasing by 6% and 8%, respectively. In Perth, occupancy rates are at 95%, and rental rates have risen by 5%, while Adelaide sees rates of 94% with a 4% increase in rental rates over the past year.
What is the government and private sector doing about the housing crisis?
The strong demand for student housing in these cities is driven by their youthful population and the influx of international students. In response to the housing crisis, the Australian government is taking steps to enhance housing supply, aiming to build one million new homes starting in 2024. Efforts include increased incentives for long-term rentals and investment in social and affordable housing.
Starting from July 1, the Australian government extended working hours for international students, allowing them to work up to 48 hours a fortnight, with exceptions for those working in aged care until December 31, 2023. International university graduates from Australian institutions also enjoy an extra two years of post-study work rights from July 1.
Furthermore, the popularity of Australia as an international student destination has attracted private investors, leading to increased investment in the student accommodation market due to its high occupancy rates and reliable returns.
As the demand for international education continues to rise, addressing the housing crisis becomes imperative. Additionally, with the growing number of Indian students choosing Australia for their studies, it is crucial for them to be informed about accommodation availability and the cost of living.
What does the housing crisis mean for Indian students?
Australia is one of the top choices for Asian students to study abroad. Close to 100,000 Indian students (or 17%) make the second largest cohort of international students studying in Australia. Indian students are second in line following the Chinese students who make the 22% of international students in Australia.
With its world-ranking universities, and top-notch programs, Australia continues to be one of the most sought-after study abroad destinations by Indian students. To explore your study choices in Australia, book a free call with our admissions expert here.