The ultimate guide for investing in university accommodation

Article by Sinead Clarke Communications Manager 23 January 2025

With the new academic year just around the corner, the buzz around Australian universities is palpable. Each year a diverse student population comprising both Australian and International students, flock to Australian universities, with an estimated 1.4 million students enrolled across the country. This renewed activity presents a unique opportunity for savvy investors, particularly those seeking a stable and potentially high-yielding investment.

The benefits and risks of investing in student accommodation

Just like this TikTok video highlights, investing in student accommodation offers several compelling advantages:

• High demand and consistent occupancy: As our video showcased, student housing developments are becoming increasingly common across major Australian cities. This strong demand, fueled by a continuous influx of both domestic and international students, ensures a steady stream of potential tenants and high occupancy rates.
• Prime locations: Student accommodation properties are typically strategically located near university campuses and major transportation hubs, ensuring high demand and potential for capital growth.
• Flexible lease terms: Short-term leases common in student accommodation allow investors to adjust rental prices regularly to reflect market conditions and inflation, maximising returns.
• Relative stability: Universities generally demonstrate resilience during economic downturns, making student accommodation a relatively stable investment option. 

Many government initiatives exist to assist first-time property investors. We have created a helpful resource that explores first-time home-owner programs in detail which might be valuable as you navigate the financial aspects of student accommodation investment.

However, like any investment, it’s crucial to be aware of the potential risks:

• Market saturation: Overdevelopment in certain areas could lead to increased competition and potentially lower rental yields.
• Maintenance and turnover: Student accommodation may require more frequent maintenance and higher turnover rates compared to traditional residential properties.
• Changing student demographics: Shifts in student preferences and living arrangements can impact demand and rental rates.
• Potential for vacancies: While generally low, there’s always a risk of vacancies during periods of low student enrolment or between academic semesters.

As a first-time investor, it’s crucial to conduct thorough due diligence before making any investment decisions. This includes researching the market, understanding the legalities involved and considering your financial goals. Our previous blog offers a helpful resource, that can guide you through this process.

Where to invest in student accommodation

Choosing the right location is key to maximising your returns on a student accommodation investment. Look for areas with a high concentration of universities and colleges, as well as good access to public transportation and amenities. Consider factors such as proximity to campus, local rental markets and future development plans when making your decision.

Kingsford, NSW

Kingsford in Sydney is a prime location for student accommodation investors, situated directly adjacent to the University of New South Wales (UNSW), one of Australia’s leading universities. This close proximity ensures high demand from both domestic and international students, making it an attractive market for property investors.

Kelvin Grove, QLD

Kelvin Grove, home to the Queensland University of Technology (QUT) campus, is a highly sought-after location for student accommodation. Its proximity to the university, combined with excellent public transport links to the city centre, makes it a convenient and desirable location for students. The vibrant atmosphere, with numerous cafes, restaurants and entertainment options, further enhances its appeal. However, it’s crucial to research current market conditions and potential competition from other student accommodation providers in the area before making an investment decision.

Carlton, VIC

Carlton, a vibrant inner city suburb of Melbourne, offers a highly desirable location for student accommodation. Its close proximity to both the University of Melbourne and RMIT University, coupled with excellent public transport links and a vibrant student-friendly atmosphere, makes it a consistently popular choice. However, it’s important to note that Carlton is a highly competitive market with a strong demand for rental properties. Thorough market research and careful property selection are crucial to ensure a successful investment in this dynamic location.

Macquarie Park, NSW

Macquarie Park, home to Macquarie University, presents a strong investment opportunity in student accommodation. Its convenient location, with excellent access to public transport and a thriving commercial hub, makes it highly attractive to students. The presence of a major university within the precinct ensures a steady stream of potential tenants. At the same time, the area’s growing reputation as a technology and business hub further enhances its appeal. However, careful market analysis is crucial to assess the level of competition from existing student accommodation options and to identify potential areas for growth within the Macquarie Park market.

Murdoch, WA

Murdoch, home to Murdoch University, presents a compelling opportunity for student accommodation investors. With a growing student population and a strong focus on research and innovation, the university continues to attract both domestic and international students. Proximity to the campus, combined with good access to public transportation and a range of nearby amenities, makes Murdoch an attractive location for students seeking off-campus housing. However, thorough market research is essential to identify areas with high demand and assess potential competition from existing student accommodation options in the area.

Douglas, QLD

Douglas, located near Griffith University’s campuses, presents an interesting investment opportunity. As a growing suburb with a strong student population, Douglas offers a mix of residential and commercial areas, creating a dynamic and potentially lucrative market for student accommodation. However, it’s crucial to conduct thorough market research to understand the existing supply of student housing in the area and assess the potential for future growth and demand.

Acton, ACT

Acton, located directly opposite the Australian National University (ANU) campus, offers a highly desirable location for student accommodation. With close proximity to the university, students have easy access to lectures, libraries and campus amenities. The vibrant atmosphere, coupled with a range of cafes, restaurants and entertainment options, makes Acton an attractive and convenient living option. However, it’s crucial to conduct thorough market research and consider potential competition from other student accommodation providers and on-campus housing options before making an investment decision.

Investing in student accommodation can be a rewarding venture for savvy investors. By carefully considering factors such as location, market demand and potential risks, you can increase your chances of success. Remember to conduct thorough research, consult with financial professionals and stay informed about the evolving student housing market. With careful planning and a long-term perspective, student accommodation can be a valuable addition to your investment portfolio.

Disclaimer: This blog post provides general information only and does not constitute financial advice. Investing in property involves inherent risks and past performance is not indicative of future results. Always conduct thorough research and consult with qualified financial professionals before making any investment decisions.