Student accommodation rents are tipped to continue to rise on the back of a shortage of rooms.
Oxford Economics Australia says more than 9000 student accommodation beds are expected to be delivered by 2028, but that still will not be enough to meet demand, as more international students return to Australia.
Student accommodation advertised asking rents have gone up by 27% since 2020.
The report says the market will remain very tight in the near term, especially given extended waiting lists.
This year, only about 1900 new beds were delivered.
“Construction costs have rebased significantly higher out of the pandemic, compounded by increased borrowing costs,” the report says.
“This is challenging project feasibilities. Although the surge in rental revenue and increased institutional backing will provide support, some projects are likely to fall over at the early planning stage.
To help meet demand, Australian Unity, MaxCap Group and UniLodge plan to develop a $1 billion portfolio of student accommodation facilities.