Booming tenant market attracts global investor attention

In the nation’s major capitals, a market of renters is growing by thousands annually, and property investors are capitalising on the opportunity.

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Tertiary students are driving unprecedented demand for accommodation, particularly around major universities in Australia.

According to a report released by commercial property firm Knight Frank, student numbers in Australia have increased about 50 per cent in the last 10 years.

In the last four years alone, 25,000 purpose-built student accommodation rooms and dorms have been built in Australia, but that still hasn’t catered for the current and predicted demand.

“Despite some growth, demand is expected to outstrip new supply over the long term. A scarcity of developable land in close proximity to many Australian universities remains a barrier to increasing supply, with many institutions situated in urban locations,” said Ben Burston, Knight Frank partner and head of research and consulting.


The federal government is targeting 40 per cent of 25 to 34-year-olds to hold a degree by 2025, up from the current rate of 27 per cent, which suggests the demand for housing is only going to intensify in suburbs close to universities.

This mimicks global trends, especially in the United States, where students typically relocate for their tertiary education.

“Global investment into purpose-built student accommodation was a record US$16.3 billion in 2018, surpassing the previous high of US$15.9 billion in 2017. Cross-border capital has accounted for approximately 40 per cent of this total investment over the last three years, compared to an average of 26 per cent across all real estate sectors,” said Mr Burston.

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