PBSA sector welcomes govt policy focus but says more needs to be done

THE Albanese government has promised to limit international students with a cap on each university, while boosting student accommodation to cut back pressure on the private rental market.

The 2024-25 Budget identified the international education sector as a national asset but noted enrolments have not been met with an adequate increase in student housing.

This comes as the number of international students in Australia surged by 15% to 671,000 in the year to the end of March.

“To deliver more accommodation for students and to reduce pressure on the private rental market, the government will work with the higher education sector to develop regulations that will require universities to increase their supply of student accommodation,” said treasurer Jim Chalmers.

A new formula is now set to introduced to will place a cap on how many international enrolments each university can take and how much housing they build.

The announcement has been welcomed by the purpose-built student accommodation (PBSA) sector, though not without concerns.

The Property Council of Australia’s Student Accommodation Council has warned the government against forcing universities into competition with the private market.

“While we wait to see the proposed regulations, the industry is ready to work with the higher-education sector to deliver the student accommodation they need. This includes placing students into existing beds today and building new beds into the future,” said Torie Brown, executive director at the Student Accommodation Council.

“However, the government needs to be careful in how they implement these reforms. There is a lot of capital already invested and looking to invest in Australian PBSA – and we want universities to work with the existing private sector rather than being forced to compete.”

The current pipeline of new PBSA– as reported by the council in April–will not adequately meet future needs with just 7,770 new beds forecast to come online by 2026.

The Student Accommodation Council also calls on the government to be clear about how many of the forecast 260,000 migrants will be student visa holders.

Meanwhile the largest owner, developer and operator of PBSA in Australia, Scape Student Living, have welcomed the federal engagement on international education but is calling on state governments to remove barriers for the sector.

“While the Framework represents a significant step forward, ongoing collaboration is crucial to ensure its success. It took a global pandemic for the immense value of international students and the PBSA sector to our economy to be understood and recognised,” said Craig Carracher, co-founder at Scape PBSA.

“Recent NAB research confirmed their critical contribution, with international students supporting *50% of 2023 GDP growth. But poor decision making at state and local level has dissuaded investment in the sector since the pandemic as the industry tried to get back onto its knees just months after the lockdown while student accommodation buildings were still largely empty.”

Specifically, Scape has called out Victoria’s taxes on development of PBSA, Brisbane’s rate levies on the sector and NSW’s co-living planning regimes.

“We commend the Federal Government’s commitment to understanding the sector’s nuances, however, inconsistencies at the state level create uncertainty for investors,” said Anouk Darling, CEO at Scape.

“For instance, Victoria grants exemptions to Build-to-Rent projects while imposing taxes to PBSA that discourage investment. This creates a mixed message that is not conducive to a vital PBSA sector.”