Why to Invest in Student Housing during 2023 - Part 2

Monday, May 8, 2023

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There continues to be a rental housing shortage throughout North America, especially for students. During the pandemic, many students were required to study online, but have now returned to regular on-campus classes. This has created an increased need for off-campus housing in both Canada and the USA. Many of our partner schools have expressed an urgency for increased housing options near their campuses. 

 

So why invest in student housing?

 

One of the most beneficial reasons to invest in student housing this year is due to the current market conditions.

 

Vacancy Rates:

 

Rental vacancy rates continue to decrease in many areas of Canada and the United States. Some factors include high immigration, increased international students, lack of affordability (due to higher housing costs, inflation, and increased mortgage costs), and students returning to on-campus classes after COVID-19.

 

In Canada, trends from 2022 reports indicate that the rental vacancy rate had decreased to 1.9% for purpose-built rental apartments.  While supply surged, demand further surpassed resulting in a near historic low.

 

Some of the lowest rental vacancy rates in Canada include:

 

  • Saguenay, QB – historical low of 0.6%
  • Peterborough, ON - historical low of 0.7%
  • Vancouver, BC – continued low around 0.9%
  • Halifax, NS – historical low of 0.9%
  • Ottawa-Gatineau, QB –  lowest over two decades of 0.9%
  • Kingston, ON – continued low around 1.1%
  • Kitchener-Cambridge-Waterloo, ON – lowest over two decades of 1.2%
  • St.John, NB – historical low of 1.3%

 

The above mentioned cities are several of many that have low vacancy rates or have experienced historical lows.

 

In the United States, rental vacancy rates are at its lowest point in 38 years. A shortage is particularly evident in certain areas, especially in the West and Northeast regions.

Some of the lowest rental vacancy rates in the USA include:

 

  • Akron, OH – 0.7%
  • Richmond, VA – 1.8%
  • Worcester, MA – 2.2%
  • Milwaukee, WI – 2.2%
  • Fresno, CA – 2.8%
  • Providence, RI– 2.8%
  • Greensboro, NC – 2.9%
  • Raleigh, NC – 2.9%

 

Out of the 50 states, Massachusetts, Maine, Utah, Kentucky and Montana have the lowest rental vacancy rates.

 

Unsure of where to invest or how to start looking for opportunities?

 

Before making an investment in student housing, investors should analyze the market and consider some situational factors. Check out the blog below for more information.

 

READ MORE:  Investing in Student Housing



The Places4Students.com Team