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Business Insights | Looking Beyond the Noise: What Student Policy Changes Really Mean for PBSA

Fresh debate around international student policy has raised questions for Australia’s PBSA sector. However, visa approvals, commencements and future planning allocations suggest demand from higher education students remains resilient and supportive of long-term sector fundamentals.

October 6, 2026

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International student policy has once again returned to the centre of Australia's political conversation, prompting fresh questions about the outlook for the Purpose-Built Student Accommodation (PBSA) sector. 

With both major parties proposing reforms to temporary visa settings, headlines have focused on the prospect of lower migration and tighter student numbers. For property investors, the immediate question is obvious: could these changes weaken one of the key demand drivers underpinning Australia's PBSA market? 

The data suggests otherwise. 

While recent policy reforms have undoubtedly reshaped parts of the international education sector, the higher education market, which forms the foundation of institutional PBSA demand, has remained remarkably resilient. 

Looking beyond annual headlines

Short-term policy announcements often create uncertainty, but the longer-term trend is more important. 

Higher education visa grants have remained broadly stable over the past three years, with approximately 196,000 visas granted in 2025-26, slightly above pre-pandemic levels. 

graph 1

Figure 1: Higher education visa grants have remained broadly stable over the past three years and sit above pre-COVID levels. 

Rather than signalling a structural decline in demand, the data points to a higher education market that has largely normalised following the post-COVID recovery period. 

The composition of students entering Australia has also remained relatively unchanged. China continues to be the largest source market for higher education students, demonstrating the ongoing depth of demand from one of Australia's most important education markets 

graph 2

Figure 2: China remains the largest source market for higher education students, with approval rates remaining strong. 

For PBSA investors, this consistency is important. Demand fundamentals appear to be holding despite widespread discussion around migration and visa reform. 

Demand remains well above pre-pandemic benchmarks

Perhaps the clearest indicator comes from student commencements. 

While visa approvals provide insight into future demand, commencements reflect students who are actually entering the education system and, in many cases, seeking accommodation. 

International student commencements at higher education institutions reached approximately 212,000 in 2025, almost 20% above 2019 levels. 

graph 3

Figure 3: International student commencements at higher education institutions remain well above 2019 levels. 

This suggests that the student cohorts most likely to utilise PBSA continue to enter the market in substantial numbers. 

At a time when investors are assessing the durability of demand across living sectors, the commencement data paints a relatively clear picture: higher education demand remains healthy. 

What the policy changes are actually targeting

Much of the public discussion around student policy tends to treat the international education sector as a single market. In reality, recent reforms have had very different impacts across education categories. 

The most significant reductions have occurred within Vocational Education and Training (VET) and English Language Intensive Courses for Overseas Students (ELICOS), where visa grants are now more than 50% below pre-COVID levels. 

graph 4

Figure 4: The most significant declines in visa approvals have occurred outside the higher education sector. 

These cohorts can contribute to occupancy in some assets, but they are not typically the primary target market for institutional PBSA developments. 

At the same time, government planning settings continue to demonstrate strong support for higher education. Under the National Planning Level framework, almost 200,000 international student places have been allocated to higher education institutions in 2027. 

graph 5

Figure 5: Higher education continues to receive a significant allocation under future planning settings. 
 
The distinction is important. Recent reforms are largely focused on improving quality and sustainability within the broader education sector rather than materially reducing higher education participation. 

The investment takeaway

For PBSA investors, the implication is relatively straightforward. 

The higher education segment that underpins most institutional student accommodation demand remains supported by stable visa approvals, strong commencement activity and substantial future student allocations. 

At the same time, accommodation supply remains constrained. Many university precincts continue to experience a shortage of purpose-built beds, while elevated construction and financing costs are slowing the delivery of new stock. 

As a result, the sector's underlying fundamentals remain intact. 

Policy announcements are likely to continue generating headlines, but the data tells a more measured story. International student demand at higher education institutions remains resilient, supply constraints persist, and the long-term investment case for Australian PBSA continues to be supported by structural demand drivers. 

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