It is reported that Australia is still the third most popular destination among overseas students worldwide, especially from China and other Asian countries. Rachel Coats, Savills’ associate director of student housing in Australia, said: “The new accommodation offers, especially in Melbourne and Brisbane, are closely watched by market participants.”

The key issue is the absorption of existing inventory properties. Australia continues to be a popular destination for students, and their lifestyle preferences, distance from campus and financing of new projects have an impact on student accommodation.

The report said: “As government subsidies continue to decline, competition among universities will intensify and quality, purpose-built housing will be an important consideration for some Australian universities.” Most existing Australian student hostels supply about 11% of the full-time student population and less than 30% of Canberra’s hostel supply.

The report notes that Australia’s universities have committed to building around 72,000 dedicated student accommodation in state capitals. However, there is anecdotal evidence that students prefer to stay away from school in some cities, from the Clayton campus of Monash University.

Sydney is considered the most profitable market, with supplies increasing from 3,600 in 2016 to 5,400 this year.

The report noted that mixed-use student housing projects seem to be the main source of new opportunities. The report concludes: “The affordability of student rents affects the financial viability of providing new housing and will continue to be a key issue, which is the most attractive and difficult issue to solve.”

In Melbourne, the availability of new beds has increased from 9,600 in the past 12 months to more than 16,000. Construction activity in Brisbane has slowed and in the past 12 months, the number of beds increased by about 600 to 10,600.