Australia is leading Asia Pacific countries when it comes to student housing investment, capturing the majority of capital deployed over the last two years.
The findings were revealed in a recent report by JLL, which found that Australia accounted for 61 percent of the region’s total student housing transaction volume in the first half of this year.
Over the past 12 months, several major global investors – including Greystar, Mapletree and M&G – have made their first Australian acquisitions in the purpose-built student accommodation (PBSA) sector.
JLL says that the majority of this investment has been concentrated in core education hubs such as Sydney, Melbourne and Brisbane.
Outside of those hubs, Perth and South Australia are also emerging as attractive markets for investment.
“We are witnessing a fundamental shift as the asset class transitions toward institutional mainstream status, moving beyond its specialist origins,” says JLL Australia head of Living, Jack Bergin.
“The influx of institutional capital is a direct response to durable, long-term demand drivers and a structural undersupply of beds. This broadening of the capital base confirms that student housing is no longer a niche alternative, but one of the most confident long-term investment plays in Australia’s real estate market.”
JLL’s optimistic findings on the growth prospects of PBSA correspond with findings in a separate report by CBRE titled ‘Accommodating the growth in students’.
Australia has potential excess demand of approximately 185,000 student accommodation rooms, based on the gap between student renters and available stock, assuming suitable product was available.
PBSA penetration sits at seven percent, or around one student accommodation bed for every 15 university students.
Even with around 34,000 beds potentially added over 2026 through to 2029, that rate would increase to only approximately nine percent.
The country had 750,000 international students in early 2026, and nearly one in three university students is an international student. In comparison, China accounts for 23 percent of international students and India is at 17 percent.
The involvement of large-scale institutional investors can be explained by the CBRE figures, which indicate that PBSA rents command a 12 percent premium to two-bedroom apartment rents in the same precinct.
The premium reflects inclusions such as utilities, furnishing, security, study areas, social spaces and other amenities.
The median rents for a sample of student accommodation studios in Sydney and Melbourne grew at a compound annual growth rate of five percent over 2018 to 2026.
Vivienne Bolla, research director at JLL Australia, says the data shows that the fundamentals underpinning Australia’s student housing sector are structural, not cyclical. “Despite fluctuations in other education segments, demand from university students has proven incredibly resilient. Higher education visa arrivals now sit more than 30 percent above pre-pandemic levels, rooted in Australia having nine of the world’s top 100 universities and a fundamental undersupply of purpose-built accommodation.”
Image: Chuttersnap, Unsplash.
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