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Student Accommodation 2025 - Pacific
August 15, 2025 20 Minute Read
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Our latest Student accommodation report includes updated commencement forecast, rents, supply and cap rates. In July, we caught-up with international students in Brisbane, Melbourne and Sydney to better understand their “demand drivers”. The quotes in the report help paint a picture on “why, where, how long”. Key insights:
- Demand: Australian Government has offered guidance on increasing 2026 intake by ~25,000 (+8.5% yoy)
- Penetration: CBRE estimate that just 6% of students have the opportunity to live on/close to campus in PBS
- Opportunity: Scope to add up to180,000 beds in precincts close to Australia’s major universities. For instance, University of Melbourne and RMIT catchment currently has 24,900 beds. CBRE estimate circa ~10k of unmet demand for PBSA in Melbourne CBD/Inner North.
- Supply: CBRE estimate 28,000 beds of new supply (Australia-wide) over 2025-28. Five largest operators account for 80% of existing product.
- Rents: Median rents grew at CAGR 5.5% over 2018-2025 across Melbourne and Sydney markets and are at a 13% premium to two-bed apartments in close proximity. See slides 17-19
- Capital: Transaction activity picked-up again in late-2024/early-2025, with the outcomes pointing to yield compression. See indicative yields and spreads to BtR on slide 22/23
Key Trends Shaping the Sector
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Demand Drivers
International student arrivals have rebounded strongly, with over 30,000 returning in 2023 alone. Domestic enrolments remain robust, and the demand for quality, well-located accommodation continues to grow. -
Supply Pipeline
Only 6% of students can access PBSA, leaving unmet demand of 10,000 beds in Melbourne and 25,000 beds in Sydney. CBRE estimate 28,000 beds of new supply (Australia-wide) over 2025-28. -
Investor Sentiment
PBSA is attracting renewed interest from institutional investors, drawn by stable occupancy rates and resilient rental growth. Yields have compressed, but long-term fundamentals remain attractive. -
Rental Trends
Median rents grew at CAGR 5.5% over 2018-2025 across Melbourne and Sydney, and are at a 13% premium to two-bed apartments in close proximity.
Melbourne and Sydney see robust rent growth and premium returns for PBSA investors, driven largely by acute under-supply.
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