Australian Student Housing Crisis Exacerbates Broader Property Dilemma - Property Inc

Australian Student Housing Crisis Exacerbates Broader Property Dilemma

The Australian housing crisis continues to intensify, with the student accommodation shortage putting additional pressure on an already stretched property market. Both the private rental sector and the housing market have seen rising prices and a lack of available properties, with various experts calling for a comprehensive response.

Student Accommodation Shortage

Fiona Killman reports on the urgent need for student accommodation as many students compete for private rental properties, increasing demand in an already tight market1. Vanessa Rader, Ray White Corporate’s head of research, highlights the dire nature of the situation, noting that there are only 422 student accommodation rooms set to be completed in NSW in the next year, whereas international student numbers in the state have surged to over 185,0001.

“There would be thousands of students who qualify for student accommodation taking up space in the housing market,” Ms. Rader said. “They are taking up housing stock that we need. It’s adding to the affordability crisis. They are being competitive with the population that really do need somewhere to live.”

Australia’s Property Crisis: A Deeper Look

In another detailed exploration, Prashant Mehra delves into Australia’s overarching property predicament2. Over the past year, housing prices have risen by 22%, despite the Reserve Bank of Australia’s efforts to stabilize the market through interest rate hikes2. This increase has rendered about 90% of first-home buyers unable to purchase property.

Several key factors have fueled Australia’s housing crisis over the decades, including:

Rapid migration and population growth.

Supply constraints like land shortages, rising building costs, and labor shortages.

Declining interest rates, stimulating demand for properties.

Tax incentives promoting property investment.

Government policies boosting demand without adequately addressing supply constraints.

HIA’s senior economist, Tom Devitt, emphasized the disparity between housing demand and supply, noting that while population growth has surged, homebuilding rates haven’t kept pace.

Addressing the Crisis

Addressing the challenges in the property market requires a multi-faceted approach. According to PropTrack’s Angus Moore, increased construction in areas where people want to reside is crucial. Recent initiatives such as the Housing Accord, aiming to construct one million new homes over five years from 2024, and the establishment of a $10 billion Housing Australia Future Fund offer some hope, but more strategic efforts are needed.

Experts, including Ms. Rader, underscore the importance of revisiting and re-strategizing student accommodation, especially given the global recognition of Australia as a top education destination1. Anouk Darling, CEO of Scape, a leading student accommodation provider, reaffirms the burgeoning demand, stating, “We have had waiting lists across all our assets, the majority in Sydney.”

Australia’s housing conundrum, exacerbated by the student accommodation shortfall, requires prompt and comprehensive solutions. Policymakers must work collaboratively, taking both immediate and long-term measures to alleviate the crisis and ensure housing affordability for all.

References:

Killman, F. (Date). Call for more student accommodation as pressure mounts in private rental market. ↩ https://www.realestate.com.au/news/call-for-more-student-accommodation-as-pressure-mounts-in-private-rental-market/ 

Mehra, P. (Date). Australian Housing Crisis: The High Price We’re Paying. ↩ https://www.forbes.com/advisor/au/property/high-cost-of-australian-housing/ 

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