A boost in student accommodation at the University of Wollongong is having a major flow-on effect for the city's rental market.
Rental vacancies are up, and rents are going down, and that's in large part due to the university's push to provide additional student accommodation, Real Estate Institute Illawarra chairman Trever Molenaar said yesterday.
The university's purchase of the Ibis Hotel in Market Street - which is now called Marketview and home to almost 150 students - took students out of the city's rental market when it opened last February.
The expansion of the Kooloobong site on the main campus to include 360 new beds by late March will change the rental landscape even further.
"When the Ibis came online with student accommodation, real estate agents definitely felt the impact, and they will again see the impact when the additional 360 beds become available," Mr Molenaar said.
"It effectively takes 100 tenants out of our pool of buyers - as two or three students usually share a unit.
"This will have a significant impact on the local rental market, especially in areas surrounding the university like North Wollongong, Keiraville and Gwynneville."
According to the Illawarra Regional Information Service, Wollongong's rental vacancy rate is slowly rising - a good thing for would-be tenants but perhaps not such great news for landlords.
In September, figures from the Real Estate Institute of NSW showed a vacancy rate for the city of 2.1 per cent - in November that had risen to 2.5 per cent.
A comparison between 2011 and 2012 also reveals a steady increase in vacancies: for instance in January 2012, Wollongong's rental vacancy rate was 2.3 per cent, compared to just 1.3 per cent in January 2011.
"The increase in university accommodation has eased the burden that had been placed on the vacancy rate, although it's still quite low," Mr Molenaar said.
"Of course more vacancies has meant that some inner-city rentals, which would have been snapped up straight away, have been sitting on the market for double the time they would have otherwise."
Once complete, Kooloobong Village will be one of nine residences run by UOW, which will offer a total of 1530 beds.
According to UOW student residence manager Alison Hemsley, high student demand has led the university to invest in additional accommodation.
She said UOW research had shown that students living in university accommodation performed better academically.