Australia’s supply of Purpose-Built Student Accommodation (PBSA) is expected to increase by 34,000 beds from 2026-2029, according to a new analysis by CBRE. This represents a 34% increase on current volumes, with Melbourne accounting for 28% of the supply, followed by Perth at 22% and Sydney at 20%.
The increase in supply is still not enough to meet the demand for PBSA in Australia, with a shortfall of approximately 185,000 beds. One in three Australian students is an international student, and the country’s intake of international students is expected to remain broadly flat over the next five years.
CBRE notes that the penetration of PBSA in Australia is relatively low, at 7% of students, compared to other countries. Since 2022, student accommodation rents have increased substantially, along with a recovery in international student numbers. Sameer Chopra, CBRE’s Head of Research Pacific, notes that newer and highly amenitised stock is providing a boost to average market rents.
According to Mr Chopra, “Student accommodation rents are currently at a 12% premium to rents for two-bedroom apartments in the same precinct.” He also notes that nearly a quarter of PBSA standard suites have rents above $700/week. This phenomenon is no longer limited to Sydney and Melbourne, but is also being seen in Adelaide, Brisbane, and Perth.
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The premium rents are explainable due to the amenities offered by PBSA, such as furniture, utilities, breakfast and coffee facilities, community and social activities, safety and security features, and amenities like gym and study areas. Rosie Young, CBRE Director, Living Sectors – PBSA, Valuation and Advisory, notes that cap rates for PBSA assets in Australia have been broadly stable over the past 18 months, despite volatility in interest rates.
While there have been operational challenges facing the PBSA sector, yields have proven to be resilient, with investors taking a long-term view. The fundamentals of the living sector and PBSA remain highly appealing, according to Ms Young. CBRE assess the median rent for a sample of student accommodation studios in Sydney and Melbourne properties grew at CAGR [compound annual growth rate] 5pc over 2018-2026.
2026 Rent Growth and Legislative Effects on Student Housing
In 2026, national rent growth was low single-digit, with Brisbane outpacing Melbourne and Sydney.
“Whilst there have been some operational challenges facing the PBSA sector this year with the introduction of increasingly tenant-friendly legislation, making it easier and cheaper for tenants to terminate agreements early, yields have proven to be surprisingly resilient despite the higher rate environment…investors are taking a long-term view with the fundamentals of the living sector and PBSA still proving highly appealing,” Ms Young said.
