Australia has long been one of the top destinations for international students, drawn by its high-quality education system, multicultural environment, and attractive lifestyle. However, the relationship between universities, international students, and the housing sector has become increasingly strained.
International students represent a critical source of revenue for Australian universities and contributed $48 billion in 2023 to the national economy. There were 793,335 international students studying in the first semester of 2024, the majority of which are Chinese and Indian nationals, with Queensland accounting for 15% of the total. Recent caps on the number of new international students’ universities can enrol will commence in 2025 was aimed to reduce the strain on housing in the short term, but recent findings from Group of Eight Australia suggest there is no direct link between international student numbers and the nation’s current housing crisis, but rather long-term structural supply issues in the housing market are the real cause for rental pressures.
With Brisbane’s increasing popularity as a destination for both domestic and international students, driven by the presence of leading educational institutions like the University of Queensland, Queensland University of Technology, and Griffith University, the demand for student housing has seen a sharp rise. In response, PBSA developments are reshaping the accommodation landscape, offering a dedicated, amenity-rich environment tailored to the specific needs of students.
One of the most pressing issues for both Australian citizens and international students is access to affordable and suitable housing. Brisbane has experienced a housing crisis exacerbated by rising rents, low vacancy rates, and an overall lack of affordable accommodation. As a result, PBSA has emerged as a solution to accommodate university students while freeing up local rentals. The demand for PBSA has surged with new CBD developments such as Brookfield’s 240 Margaret Street, the repurposing of 150 Charlotte Street and Dexus & Marquette’s repurposing of 41 George Street all in the pipeline. However, with protracted construction timelines and increased construction costs, new supply is struggling to keep up with demand.
The Federal Government has capped the number of new international students commencing in 2025 at 270,000 with individual caps placed on specific universities. Simultaneously, the government will implement regulatory requirements to ensure universities deliver more PBSA. This will increase the level of housing supply and help ensure that increases in international student numbers do not put pressure on the domestic housing market. The government’s caps on international students for individual universities will be influenced by how much PBSA they provide, requiring universities to establish new PBSA if they wish to increase their enrolments above their initial allocation. Any new accommodation will be available to both local and international students reducing pressure on house prices and rents in major cities ensuring universities and the Australian economy can benefit from the lucrative overseas market.
Brisbane universities are already planning ahead with UQ announcing a new development of 1,018 beds adjacent to the existing Kev Carmody House on Walcott Street and QUT’s decision to take over the 41 George Street redevelopment. With Griffith University’s upcoming conversion of the Treasury Building into a CBD campus and the demand from other universities to secure PBSA beds, confidence in the sector is at an all-time high. Developers, operators and investors are eager to capitalise on the government’s mandates ensuring they are not left behind. With large amounts of private funding from numerous both domestic and international funds such as Australian Unity, Brookfield and Nuveen, billions of dollars have already flooded the sector with more expected to come.
Hugh Menck MRICS
Head of Capital Transactions
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Jason Lynch
Capital Transactions
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Archer Halliday
Analyst | Capital Transactions
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