Thinking of Buying a Student Accommodation Business in Australia? Here Are 3 Vital Questions to Ask

The Australian student accommodation industry is valued at $340 million in 2024, with an annual growth rate of 2.6% projected through 2029.

With international students making up over 75% of demand, university enrolments are expected to increase by 1.25% annually through 2030.

While rising tuition fees and living costs present challenges, undersupply in key cities such as Perth and Brisbane is driving new investment.

Purpose-built student accommodation (PBSA) now accounts for 45.5% of industry revenue, with investors shifting from university-managed housing to private developments. 

However, financial viability, location advantages, and compliance factors must be carefully assessed before investing.

1. Is the Business Financially Stable and Profitable?

Why It Matters

Student accommodation businesses operate with high occupancy rates, with industry-wide profit margins at 26.7%.

However, financial sustainability depends on room pricing, service offerings, and partnerships with universities or private housing providers.

What to Check

• Revenue trends & profit margins – Review financial statements from the last three to five years to assess profitability.
  
  
• Occupancy rates & seasonal demand – Compare against industry benchmarks (85-95%) and assess peak booking periods.
  
  
• Cost structure & operational efficiency – Labour accounts for 38.5% of revenue, making cost management essential.
  
  
• Diversified revenue opportunities – Assess income streams, including short-term student housing, co-living spaces, and partnership contracts.
  
  

2. How Competitive is the Business’s Market Position?

Why It Matters

The student accommodation sector is highly competitive, with PBSA developments, private rentals, and shared housing competing for market share.

Well-located properties near universities, transport, and lifestyle amenities tend to attract higher occupancy rates.

What to Check

• Location & proximity to universities – Assess accessibility to university campuses, public transport, and city centres.
  
  
• Independent vs. institutional ownership – Determine if the business benefits from partnerships, branding, or economies of scale.
  
  
• Student experience & facility offerings – Properties with premium amenities (e.g., study lounges, fitness centres, communal spaces) command higher rates.
  
  
• Market demand & rental trends – Analyse university enrolment projections and private rental competition in the area.

3. Is the Business Aligned with Industry Trends and Future Growth?

Why It Matters

Student accommodation businesses must adapt to evolving preferences, including long-term leasing, smart security systems, and online booking platforms.

Properties that invest in digital marketing, automated operations, and co-living spaces are better positioned for future growth.

What to Check

• Technology & automation integration – Assess investment in online booking systems, AI-driven pricing, and smart security features.
  
  
• Regulatory & compliance considerations – Ensure adherence to tenancy laws, fire safety regulations, and APSAA accreditation.
  
  
• Expansion & future-proofing opportunities – Identify potential to scale through postgraduate housing, short-term student rentals, or international student programs.
  
  
• Market adaptability & revenue stability – Determine how well the business can adjust to shifts in international student demand and regulatory changes.

Ready to Invest in a Thriving Student Accommodation Business?

With increasing international enrolments, strong demand for purpose-built housing, and an undersupply in key markets, the Australian student accommodation industry presents a compelling investment opportunity.

However, financial sustainability, competitive positioning, and adaptability to market trends are key to long-term success.

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