Savills News

Australia the most investable student accommodation market globally

Investment into the Australian student accommodation market has reached record levels in 2019, highlighting a significant shift in maturity and momentum for the sector.

Opportunities to acquire national portfolios, significant capital raises and on-campus activity has further pushed the asset class into the mainstream spotlight.

Reflecting this sentiment, the newly released Savills 2019 Global Living Report ranks the main global student accommodation markets according to their attractiveness to investors. Australia tops the inaugural index.

The report looks at a range of factors including demographics, migration, affordability, local legislation, delivery of accommodation, University rankings and student numbers, weighting each factor according to its importance.

According to Conal Newland, Director, Student Accommodation at Savills Australia, many developed countries are experiencing a fall in their student aged population.

“Australia ranks first as a market forecast to see strong growth in its student age population. The young, Millennials and Generation Z, are shaping demand for real estate’s fastest growing asset classes, including purpose built student accommodation.

“While much of the developed world ages, Australia’s most urbanised cities are forecast to remain youthful, underpinning demand for student accommodation” he said.

Savills 2019 Global Living Report identifies six Australian capital cities which feature within the top 100 cities around the world which in 10 years’ time will be the most ‘youthful’ (the largest share of people aged 15-39).

Forecast youthfulness is shaping investment into Australia’s student accommodation sector, with demographic change shifting the profile of the student accommodation investor.


15-39 (% of total) 2029













Source: Savills Global Living Report 2019, Oxford Economics

According to Paul Savitz, Director of Student Accommodation at Savills Australia, improving Higher Education standards across the globe is broadening choice and making the competition for international students greater than ever.

“Although university tuition fees are a drag on Australia’s ranking, its institutions have a strong international standing and remain a top destination for foreign students.

“The US and the UK still remain by far the top two countries globally for universities within the top 400, with 75 and 45 respectively in 2020, followed by Germany (23) and Australia (22).

“But, both the US and UK have seen a decline in the number of institutions within the top 400 since 2010. Australia’s post-study work visa provides a huge incentive for many people to consider studying in Australia” he said.

Between 2012 and 2017 the total number of students in Higher Education increased by 11% to exceed 220 million. While favourable demographic shifts have driven growth in some markets, many nations are grappling with slowing growth or a declining student age population. In order to counteract this, a number of countries are actively increasing their appeal to international students.

Mr Newland said over the past five years, and only second to India, the number of students studying in Australia has grown substantially.

“By contrast many major student markets, including the UK and US, have seen the size of their university-aged populations decline over the same period.

“Australia has benefited greatly from its geographic proximity to major Asian source markets such as China, India, Vietnam and Malaysia. The number of international students enrolled in Higher Education in Australia now accounts for around a third of total students” he said.

The US remains the largest market for international students, host to one million international students (but only 5% by share of total students). The UK is the second largest market for international students by number with 460,000, closely followed by Australia, host to 430,000. Together, these three countries account for a third of all globally mobile students, according to UNESCO.

Having addressed the above mentioned factors, low levels of PBSA provision, transparency around investment, and political, social and economic stability pushes Australia to the top of the investability ranking. Canada, a market with similar characteristics to Australia, ranks second.

Mr Savitz said presently, “Until early 2019, a lack of available operational assets to purchase has held the sector back from an investment, liquidity and access perspective. However, with over 24,240 student accommodation beds completed since January 2017 and a further 4,170 expected to be completed by the end of 2020, we expect transaction volumes to continue tracking upward.”

View the report: Australian Student Accommodation: Spotlight on Investability.


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