Quality off-campus accommodation close to universities is in high demand
The demand for good quality student housing has been growing steadily over the past few years.
Despite the #feesmustfall protests, Jako le Roux, senior property investment consultant at Just Property Invest, says the demand for high standards of accommodation is expected to intensify among those who can afford it.
In addition, the student market is no longer seasonal; it is in demand all year, and parent buyers are increasing.
“There is a severe shortage of student accommodation in South Africa, so the property type has become very attractive to investors in the private sector. The vast majority of South African students attend local universities and colleges, and there is still a huge gap between the demand for on-campus accommodation and available spaces off campus.”
Le Roux says the private sector will play a vital role in meeting this demand and is likely to find student housing investments are “among the most attractive investments they can make”.
Fewer than 20% of first-year students can be accommodated in on-campus accommodation which, he says, is often unhygienic and unsafe.
There is increased demand for student housing in cities including Stellenbosch and Cape Town, Pretoria, and parts of Joburg, such as areas near Wits and the main University of Johannesburg campus. In Durban, Musgrave has become popular with the student market, Le Roux says.
“Students are drawn to the area’s central location and amenities and the fact that it is close to several local colleges and universities.” In the past quarter, PropertyFox has seen “a significant increase” in interest for student accommodation, says chief executive Crispin Inglis. In general, parents are looking to invest on behalf of their university children.
“This is definitely cyclical as we see an increase in these types of investment sales closer towards the last quarter annually.” Although the most popular student city in the country is Cape Town, Inglis says student metros in Joburg, Pretoria and Durban are growing.
A well-developed and attractive education system is a meaningful indicator of a city’s growth potential, long-term stability and future demand for rental stock, says George Radford, an international real estate expert and Head of Africa at IP Global. In cities like Berlin – which is ranked seventh on this year’s QS Best Student Cities list – multi-use developments with a mix of residential and commercial spaces offer convenience, security, and access to communal areas.
Radford advises investors looking to buy properties in student cities, both locally and internationally, to be flexible and amenable to tenants wanting to share the burden of rent or live communally. Another strong appeal factor for student accommodation investors is a reliable and affordable public transport system and a cyclist-friendly environment.
These factors are noted in the popularity of Berlin’s neighbourhoods of Friedrichshain, Kreuzberg, and Neukölln. These places are popular among students for their affordable housing, bars, cafes and trendy shops, he says. “Students have unanimously highlighted the fact that it’s an affordable place to live in comparison to other similarly sized cities.
Scholars opting for communal living arrangements or flat shares can maintain a great quality of living in Germany’s capital,” Radford says. London is ranked the world’s best for university students and offers world-class universities, rich heritage, vibrant nightlife, trendy neighbourhoods and multi-cultural diversity.
But while these aspects have been attracting students in droves from all over the world, Radford says it is far from a cheap option. “The cost of accommodation and living expenses in Central London are comparatively higher than the rest of the UK.”