Ireland urgently needs more purpose-built student accommodation. Universities are expanding, international demand remains strong, and pressure on the wider rental market has intensified as students compete with families and young professionals for scarce housing.
Yet new purpose-built student accommodation (PBSA) development has not kept pace, and the shortfall is now a structural constraint on higher education growth.
At Elkstone, we see both the opportunity and the friction in the sector. We have delivered student accommodation across Ireland, including our Queen Street, Galway development, and we have further schemes in planning that could support universities and relieve pressure on the private rental market.
These projects are wanted by students and institutions. The missing ingredient is viability. PBSA only reaches site when the economics are financeable, and when investors can model income and exit values with confidence over the life of a project.
This is precisely why Elkstone was proud to support the establishment of the PBSA Council of Ireland. The council provides a unified, evidence-led voice for the sector so that policy is informed by how PBSA actually operates, how it is funded and how students use it.
When regulation ignores those realities, supply slows. When policy aligns with them, delivery accelerates.
Over recent years core capital, particularly pension funds and other long-term buyers, has largely stepped back from Irish PBSA. These investors buy stabilised, income-producing assets on horizons of 20 years or more.
Their participation matters because they set the benchmark pricing and exit yields that allow developers to raise construction finance. When core capital is absent, forward funding becomes scarce, developers down tools, and the pipeline shrinks. That is one reason Ireland’s PBSA gap has widened despite record student numbers.
The retreat has not been driven by a lack of interest in student housing as an asset class. Across Europe investor appetite for PBSA remains deep because occupancy is resilient and demographics are supportive. Irish assets should be attractive in that context.
What has undermined confidence here is uncertainty about the rental framework, and a growing disconnect between permitted rent growth and the cost base required to build.
Against that background, the budget reforms are a genuine step in the right direction. Clarifying that PBSA benefits from the reduced 9 per cent VAT rate improves development appraisals immediately and sends a clear signal about the State’s support for new supply.
Reform of rent controls, and the recognition that student housing is a distinct asset class, is also welcome. These measures show that Government understands PBSA’s role in supporting students, easing pressure on families and bolstering overall housing supply.
However, one aspect of the reforms needs reconsideration if the aim is to stimulate delivery. The current proposal prevents existing schemes from resetting rents to market levels for three years. The objective is to protect students from abrupt rent shocks during their degree. That is understandable and widely shared. The problem is that the mechanism, as drafted, risks the opposite effect on supply.
Core capital prices PBSA on the expectation that rents can rebase at natural turnover points. If that rebasing is blocked for several years, investors will either stay out of the market or bid at materially lower levels.
Lower pricing for operating assets pushes exit yields higher. Higher exit yields make new development harder to finance. The result is a delayed pipeline and fewer new beds.
The issue is amplified by the academic-year leasing cycle. PBSA is marketed each November for occupancy the following autumn. Students sign for the academic year, not from March. A reset rule anchored to March 2026, followed by a three-year prohibition on rebasing, does not align with operations.
In practice, it means meaningful market repricing would not occur until late 2029 for students arriving in 2030. That is close to five years of below-market income for existing schemes, even before allowing for construction and financing costs that have risen faster than consumer prices.
For long-term capital, that is not a minor technicality. It is a material risk, especially because the first real reset coincides with the run-up to a general election.
Investors do not underwrite projects on the assumption that a critical repricing mechanism will survive an election cycle unchanged. The rational response is to wait for certainty. Waiting by capital means waiting for supply, and students cannot wait.
If the policy objective is to increase student housing delivery, a small adjustment would help achieve it while preserving student protections.
Allow schemes to reset rents at the start of the academic year for new tenancies, with an initial reset from the 2026 to 2027 intake. That approach respects the degree cycle for students already in place, but restores the pricing signal that brings core capital back into the market and unlocks forward funding for new builds.
It also aligns regulation with the way PBSA is actually sold and managed.
Budget 2026 has moved policy in a constructive direction. A refinement to the three-year reset rule, aligned to the academic calendar and implemented sooner, would ensure those reforms translate into cranes on site and additional student beds, not a further pause in delivery.
The sector is ready to build. Capital is ready to invest. The condition is that the rules support real-world delivery.
Ciarán McIntyre is founder and head of real estate with Elkstone
