While it’s difficult to predict the future, one thing is for certain – the student housing market will continue to grow. How exactly it will grow and evolve is something a bit more difficult to predict.
By looking at current and forecasted trends, it is possible to paint a picture of what the future might hold for the student housing industry. Here are a few predictions being discussed.
The amenity race will come to an end.
At some point, purpose-built student housing professionals will simply run out of ideas when it comes to one-upping the competition with unique amenities. They will also identify some luxury amenities that aren’t attracting residents and determine the additional cost may not be worth it. Campus Advantage agrees, and predicts that the end of the amenity war is in sight. Campus Advantage stated that location is the most important amenity; far more important than the bells and whistles stuffed into luxury buildings.
Student housing centralization will be the focal point.
This point should come as no surprise. With location being the most important aspect of student housing for developers and students alike, we’ll continue to see centralization around campuses. Housing located miles away from campus will become increasingly less desirable as more properties become available in close distance to campus. Many college and university towns are now seeing high-rise purpose-built student developments being built and it is enabling a higher volume of students to live near campus. Axiometrics demonstrated that there is a direct correlation between proximity from campus and higher rent levels, leasing velocity and occupancy. As the saying goes – location, location, location!
A rise in middle-market student housing will take place.
Middle-market or student-competitive housing is increasingly attracting the attention of major student housing players like The Scion Group. There has been lots of discussion in the media about luxury student housing, but there hasn’t been much talk about middle-market student housing. This will likely gain more attention as its profit margins have shown to be impressive; often better than profit margins of newer purpose-built projects. Eventually, the novelty of luxury student housing will wear off and more communities will see an increase in middle-market housing.
Less on-campus housing developments and more P3 partnerships.
Building on-campus housing is incredibly expensive, as well as staffing and maintaining it. For this reason, many colleges and universities haven’t built a lot of new on-campus accommodation during the past decade. Many that have, entered into some form of P3 partnership with a private developer to help ease the cost. It’s fair to predict that moving forward, the majority of new on-campus housing developments will be financed in some way by a public-private partnership.
A decline in single-family student homes.
There will likely always be a market for students wanting to share a three or four bedroom house to save on rent, but our predictions lead us to believe that fewer students will inhabit single family homes in the future. As far back as 2013, this trend was already taking shape. In a 2013 J Turner Research surveyed over 7,000 students and found that only 13% of respondents indicated a single-family home was the style of building they would most like to live in. Mid-rise apartments came in first with 38%, followed by community cottage/townhouse at 33%. With an increase in purpose-built student housing communities directly surrounding campuses, it is foreseen that more students will move out of single-family homes in coming years.
A rise in micro-unit student housing.
This trend is already starting to take shape. One example is the micro-apartments project that is underway at the University of British Columbia. In response to a lack of student housing and increasing rental rates, this new project aims to help provide students access to affordable housing. It’s reasonable to predict that other cities with extremely competitive rental markets boasting higher rents may introduce micro-unit student housing nearby major campuses.
SEE ALSO: The Future of Student Housing – 5 Fascinating Projects