As international students return to New Zealand following the disruption caused by the Covid-19 pandemic, the creation of more purpose-built accommodation in Auckland remains an important element of the city’s property landscape.
Currently, the University of Auckland acknowledges they receive twice as many applications for positions in their halls of residence than they can accommodate with their existing stock.
While the wider tertiary education sector has faced financial headwinds during the past few years, improving international student arrival numbers have shown there is a path to recovery emerging.
Data from the Ministry of Business, Innovation and Employment notes that since the opening of the New Zealand borders and greater increase in student arrivals, almost 68,500 migrants with a student visa were recorded living in New Zealand in May 2024.
Start your property search
While this figure is well below the pre-Covid figure of approximately 90,000, it is trending in the right direction and will continue to fuel demand for living quarters.
Currently there are 11 purpose-built student accommodation buildings in Auckland with two servicing the Auckland University of Technology (AUT) and nine for the University of Auckland. The total bed numbers are likely not enough to meet the growing demand.
The University of Auckland had 9,350 international students enrolled in 2023, well above pre-Covid levels, and while AUT’s international enrolment numbers have not surpassed pre-Covid levels they rose in 2023 from the previous year.
In January and February 2024, the start of schooling and Semester One at universities in New Zealand, just over 27,000 student visas on arrival were recorded, a large boost on previous years.
One future project that will be developed in Auckland in the next few years is a new high-rise student accommodation development at 256 Queen Street in the CBD.
The site is better known as a former ASB bank and more recently McDonald's restaurant.
Colliers Project Leaders has been appointed by Precinct Properties to project manage the development of the multi-million dollar project.
The proposed development will consist of approximately 600 self-contained studio units over 31 levels, with hospitality and retail at the ground floors.
Delivery is required by the end of 2027, ready for the 2028 student year.
The project also includes the preservation of the heritage building on Queen Street and its conversion to retail and character office space.
The site development will target a minimum 5 star Green Star rating or equivalent.
Nigel Cooper, Commercial Director at Colliers Project Leaders, says the Queen Street project marks a significant opportunity to improve the student accommodation offering in the CBD.
“Over 500 students living in the central city will bring enormous benefit for the central city and the universities,” Cooper says.
“At a time when the construction sector is slowing down, it’s great to have such a large project to further stimulate the industry.”
Richard Kirke, International Sales Director of Capital Markets at Colliers, says offshore investors are taking an interest in New Zealand’s broader student accommodation sector.
“With a shortage of accommodation for the growing student base, returns are sufficient to justify new developments. As a result, we have been speaking with a number of parties who are examining this sector,” Kirke says.
“With strong immigration to New Zealand recently, there will be a continued demand for student accommodation that will underpin investment interest.”
- Supplied by Colliers
