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Australia’s purpose-built student accommodation (PBSA) sector is entering a new phase of growth and complexity. International enrolments are rebounding and demand is surging. But supply is not keeping pace.
Developers and investors are under pressure to respond, yet project feasibility is being tested by land scarcity, construction cost escalation, labour shortages and a patchwork of state-based taxes and regulations. For new market entrants—including private developers entering PBSA for the first time—this landscape can be daunting.
How can developers avoid overcapitalising or underdelivering? Can more beds be delivered faster, in the right locations, without compromising on amenity, quality or operational performance over the life of the asset?
Regional challenges are reshaping PBSA strategies. In New South Wales, land near universities is increasingly out of reach, forcing developers to find creative ways to make projects viable. In Victoria, high land tax has driven up development costs by around 30 per cent, testing project feasibility.
At the same time, students’ expectations have never been higher. They want more than just a bed and a desk—but at a reasonable rent. Developments with smart app-based access and controls, wellness facilities, outdoor spaces, attractive and functional shared areas and sustainable transport options stand out in a competitive market.
But these features add cost—both upfront and throughout the asset’s life—making lifecycle planning critical. Developers must ask: are we balancing student expectations with operational realities? Are we designing spaces that will remain attractive and cost-effective to run, 10 or 20 or 30 years from now?
Of course, student preferences will vary, so clever design that enables a range of room and studio types will better cater to diverse student preferences and price points.
In the inner-city squeeze—with prime land near universities increasingly scarce—it’s important to look further afield than the university precinct. Repurposing underutilised office or commercial buildings presents a compelling opportunity to bring stock to market more quickly, provided the asset can be cost-effectively reconfigured to meet PBSA requirements.
Success will depend on careful assessment of student experience, building fabric and compliance—along with robust cost planning and early design input.
Getting projects from idea to reality is top of mind across the sector. Labour shortages are pinching every sector—and the challenge is only increasing, as residential construction competes with a pressurised infrastructure pipeline for the same skilled workers.
Contractors can be selective, so it’s important to secure interest early. Early Contractor Involvement (ECI) can help lock in builder interest, align program expectations and derisk supply chain bottlenecks.
Developers should move early to engage capable, reliable partners, but without undermining competitive tension.
Modular and volumetric construction is gaining momentum as developers seek to compress timelines and address labour and procurement pressures. While the cost savings from modular are not yet proven in Australia, the benefits of faster completion, earlier rental income, more consistent quality and fewer defects are compelling.
But modular isn’t a magic bullet. To deliver on its promise, modular must be factored into the project from day one. Structural grids, services coordination and facade systems need to be designed for repeatability and ease of manufacture. Early engagement with manufacturers and logistics planning is key to ensuring that modules meet Australian standards, arrive safely and integrate seamlessly on site.
Capex savings mean little if they lead to higher operating costs or reduced asset life. A sophisticated PBSA strategy considers the entire lifecycle—offsetting upfront costs against long-term durability, energy efficiency and ease of maintenance.
A well-structured BIM model can provide a single source of truth for design coordination, cost control and long-term facilities management. Properly designed and well-governed BIM enables predictive maintenance, reduces unplanned repairs and supports tighter energy monitoring—all of which help protect operating margins and the resident experience.
Over the next decade, portfolios that leverage advanced BIM for lifecycle management will likely outperform those that don’t.
With investors and capital providers setting ambitious ESG requirements, and future generations increasingly raising their sustainability expectations, the PSBA sector must look towards carbon reduction strategies—both embodied and operational—and long-term resilience.
This means addressing embodied carbon through material choices, electrifying building services and designing for energy efficiency and the impacts of climate change to futureproof assets and protect long-term returns.
The Australian PBSA sector is at a pivotal moment. Delivering enough supply will require a combination of innovative design, smart procurement and construction, as well as stringent financial discipline and a holistic whole-of-life mindset.
Expectations and costs are moving in one direction only. Developers who look beyond current demand towards future value will be best positioned to create assets that perform for decades—for students, investors and communities.
The Urban Developer is proud to partner with WT Australia to deliver this article to you. In doing so, we can continue to publish our daily news, information, insights and opinion to you, our valued readers.
Brian O’Mahony is state director at WT, based in Sydney. He is a highly experienced cost management specialist across commercial, mixed-use and student accommodation developments. Since starting his career in London in 2012, Brian has delivered strategic cost advice on complex projects across the UK, New Zealand and Australia. He supports clients from early concept planning through procurement, contract administration and final account reporting. Brian has led major commercial office new builds, repositioning projects, large mixed-use precincts, and student accommodation developments in Sydney’s CBD.
Ping Ting is an associate at WT, based in Melbourne. She is a Chartered Quantity Surveyor with 20 years of experience in the field, with proven expertise leading and delivering a diverse range of projects across residential, mixed-use, social and affordable housing, and aged care facilities. In recent years, she has specialised in purpose- built student accommodation (PBSA), working closely with one of the biggest PBSA providers in Australia.
Thomas Barry is an associate at WT, based in Sydney. Having worked both in Australia and the United Kingdom, Thomas has vast experience from early feasibility cost planning through to final account agreement across various sectors including purpose-built student accommodation (PBSA), residential, aged care, industrial, education and commercial.
WT is a leading international project advisory firm with more than 75 years of multi-sector experience. Our clients can tap into the collective thinking of over 2,000 of the best people in the industry, operating from 70+ offices throughout Australia, New Zealand, Asia, India, Middle East, North America, Africa, the UK and Europe. In Australia, we support our clients across property, construction and infrastructure with an award-winning team of 500 specialists in portfolio and program advisory, cost management and quantity surveying, commercial advisory, carbon and sustainability, asset and facilities management, and digital solutions.
