Push to house more students

WESTERN Australia has a long way to go to plug its shortfall in student accommodation, as record-low rental vacancy rates continue to put pressure on housing supply.

Data from Urbis showed that almost all of the state’s 8,620 purpose-built student accommodation (PBSA) beds had been allocated.

PBSA is generally built close to universities and cities, is fully furnished, and includes amenities as well as support services for students.

It attracts a higher proportion of international students than other means of student accommodation, namely residential colleges, family homestays and private rentals.

Urbis found that Perth has added 1,427 PBSA beds since the start of 2021, including the new Exchange building at Curtin which incorporated St Catherine’s College and Twin Dolphin Hall by UniLodge.

However, these figures include The Switch co-living space in Perth, which is not solely occupied by students.

Speaking at a recent Property Council of Australia WA Division event, Urbis associate director Suzie Turner said the state had an opportunity to capitalise on the growing international student market.

“I think what’s pretty clear is there is a less than 1 per cent vacancy rate in Perth, and a lot of international students come in … [but] … where are they going to live?,” she asked. “The investor market is still not great for Perth.

The owner-occupier market is still the biggest buyer group by far, but these students need somewhere to live.”

Ms Turner said the federal government’s changes to student visas – allowing international students to work more hours during their degree and after they graduate – was attracting more overseas students.

Head of St Catherine’s College, Fiona Crowe, said WA needed to cater more to specific Asian markets, citing Bhutanese students, who were migrating to Perth in large numbers.

“The Bhutanese market is huge. It is thousands of people from a very tiny country [coming] to Perth to study,” she said. Ms Crowe said a recent study showed there were very few Bhutanese staying in the state’s PBSA.

“Clearly, we’re not providing the kind of diversity that people are actually looking for,” she said.

“We need to really think about providing for the diversity of different people we want to accommodate, because otherwise we’re not catering to the sector adequately.”

Australian Bureau of Statistics data shows WA’s population grew by 62,700 last year, a growth rate of 2.3 per cent, which was the highest nationally.

Of that, net overseas migration was 37,910.

WA’s international student enrolments in 2023 are at their highest-ever level, at 47,333 enrolments to May 31, according to the Department of Education.

This is well under the NSW figure of 263,886, and Victoria, which had 195,951 international student enrolments to the end of May this year.

Industry sources say Victoria has a higher penetration rate of student accommodation facilities, and a lot of its universities are within the CBD.

While there are no student accommodation facilities currently under construction in Perth, there are some in the pipeline.

Exal Group’s proposed $70.5 million, 913-bed student accommodation facility in Waterford is anticipated to be built by 2026, after gaining approval in June 2021.

The project was delayed considerably when FIRM Construction, which was appointed to build the development, went under.

In addition, the site of the former army surplus store on Wellington Street in Perth was approved for a 30-storey, 713-bed student accommodation facility in 2019.

The site sold for $10 million earlier this year, with the new owners understood to be progressing the development.

The Wellington Street lot is within 500 metres of Edith Cowan University’s Perth city campus, flagged for completion in 2025.

Urbis figures show that Victoria and NSW contain 42,323 and 32,935 student accommodation beds respectively.

WA has the second lowest level of PBSA beds, ahead of the Northern Territory which has 663 beds.

Some eastern states student accommodation markets became oversupplied in recent years, deterring some investors in the space, but those beds are filling up quickly as more students migrate to Australia.

Property Council of Australia WA Division executive director Sandra Brewer said about 16 per cent of international students chose to stay on in Australia after their studies.

“Given Perth’s well-documented workforce shortages, the need to incentivise students to study and stay in Perth has never been more important,” she said.

“Perth’s allure as a preferred destination for students hinges on the availability of adequate and affordable accommodation options.”