Investor interest and transaction volumes have continued to accelerate over the last 18 months. Despite cooling conditions following the COVID-19 pandemic, Savills forecasts an improving market heading into 2021.
- Sydney – land price remains high and demand for competing uses continues to make PBSA feasibility challenging. Proposed changes to planning regulations will potentially further restrict the nearterm delivery pipeline. Savills anticipates increasing supply in mixed use projects alongside Co-living and Multifamily (Build-to-Rent).
- Melbourne – the recent surge in delivery of new accommodation over the last three years has not kept up with the increasing student population and implied demand for off-campus accommodation. Development sites remain plentiful; however, developers are expecting to focus on prime locations and to also focus on mixed-use development.
- Brisbane – following a large expansion in supply over the last five years and a period of stabilising occupancy pre-COVID, investor sentiment is improving, and we expect a fresh focus on new development will occur. We anticipate that these developments will be targeted towards prime sites in immediate proximity to Universities.
- Adelaide – several new projects have been delivered in the last three years and more supply is currently under construction. Uptake for new accommodation has been solid, but rental affordability continues to challenge the feasibility of new projects.
- Perth – delivery of new accommodation in recent years has been limited, but recent announcements confirming two universities moving into the CBD from 2025 is expected to act as a catalyst for further supply.