Top 10 Student Housing Trends to Know in 2024

Student housing, a resilient sector within real estate, has undergone significant changes in recent years, spurred by the pandemic and evolving student expectations. Today's students seek a comprehensive living experience that complements their academic journey, prompting investors and developers to explore mixed-use projects integrating living and learning spaces.

Sustainability, technology integration, and flexible living arrangements are key considerations shaping the future of this sector. This blog explores 10 student housing trends forecasted to influence student housing in 2024, reflecting broader societal shifts and evolving student preferences.

Top 10 Student Housing Trends Forecasted for 2024

Staying ahead of emerging student housing trends is crucial for property operators, investors, and developers. From sustainability and mixed-use models to a supply slowdown amid new investor interest - these trends shed light on the scope for growth in the market. Let’s explore the top 10 student housing trends projected for 2024:

#1 Sustainability & Green Housing

Sustainability and eco-friendly features are not new to student housing, but in 2024, investors and developers are growing more inclined towards prioritizing them. Ignoring sustainability could impact tenant retention rates. For today's environmentally aware students, developers must focus on building sustainable student housing with eco-friendly materials and features like solar panels and energy-efficient appliances. Additionally, implementing smart technologies empowers students to make eco-conscious decisions.

#2 Integrating Smart Technology

As technology evolves, student housing operators must integrate smart features or amenities such as keyless entry systems and smart thermostats. This can help in enhancing the student experience as a whole. From energy-saving smart lighting to resident-centric apps, leveraging technology caters to the digital-native generation, driving sustainable change and community engagement.

#3 Flexible Housing Options

The COVID-19 pandemic reshaped how people live and work, leading to a surge in demand for flexible living arrangements. With remote and hybrid learning models gaining popularity, students now seek short-term leases, co-living spaces, and subletting options for increased freedom and mobility. Students are also increasingly drawn to off-campus housing options, as they offer more freedom at affordable rates. These student housing trends reflect the changing landscape of education and lifestyle preferences among students in 2024.

#4 Student Wellbeing & Mental Health

Student well-being and mental health will remain paramount for student housing operators, managers, and landlords in 2024 as part of student housing trends. Prioritizing wellness amenities such as fitness centres, meditation rooms, and counselling services is crucial for supporting students' mental and physical well-being. Whether through new build developments or retrofitting existing properties, creating conducive environments for stress management and self-care is essential.

#5 Community Building & Diverse Social Spaces

In 2024, prioritizing community engagement is crucial for the student housing sector. Fostering a sense of community enhances resident satisfaction and retention, leveraging students' social networks for operators and site teams. Student housing complexes should offer diverse communal spaces such as pool tables, cinema rooms, and social events like game nights to encourage interaction and collaboration among residents. Embracing a community-first approach ensures residents thrive and transition successfully from campus to professional life.

#6 Interest in Mixed-Use Properties

Developers are gradually adopting mixed-use development models to meet diverse student demands - one of the student housing trends that will continue in 2024. These developments combine residential, office, hospitality, and commercial spaces, offering a sense of community and quality accommodation. Moreover, mixed-use properties provide affordable food options, addressing students' concerns about food accessibility. Universities and private owners can attract tenants and achieve full occupancy by offering low-cost conveniences like groceries and food within mixed-use student housing.

#7 Limited Supply Growth

The delivery of beds has seen a decline as compared to numbers from 2022. According to BONARD, approximately 61,386 PBSA beds were added globally across 121 cities in 2023. This dip is attributed to a slowdown in planning, rising construction expenses, and increased debt costs. Private sector involvement in PBSA delivery has increased, making higher education increasingly dependent on private student housing operators. With construction costs remaining high, supply growth is expected to remain limited in 2024, raising concerns about affordability.

#8 Rebound in Planning Applications

Planning activity remained low in 2023; StuRents reported that fewer than 13,000 beds were granted planning permission out of 27,000 applications. However, the student housing market is anticipating a significant rebound in planning applications in 2024. Developers will aim to address the supply-demand imbalance through university partnerships and global investor engagement, boosting bed delivery. For example, a total of 251,291 beds are expected to be delivered in the US by 2026.

#9 Strong Rental Growth

Rental prices in the student accommodation sector continued to rise in 2023 due to national accommodation shortages. PBSA costs increased by 10.1% per person per week, while HMO sector rents rose by 13.1%. Strong rental growth is one of the major student housing trends, and with increasing occupancy rates, it is expected to persist in 2024-2025. Explore rental growth and investment activity of the PBSA sector in more depth by reading “PBSA Real Estate 101: Everything About Purpose-Built Student Accommodation”.

#10 Positive Investor Interest

The student housing sector continues to attract new investors in 2024, drawn by its healthy fundamentals and robust bid sheets. Foreign investors and private capital accounted for 27% and 48% of the buyer pool, respectively, in 2023, a significant increase from previous years. Institutional investors' involvement also rose sharply from 18% to 45% of seller volume between 2022 and 2023 (Source: JLL Scott Clifton)

What’s in Store for Student Housing in 2024?

According to Scott Clifton, Managing Director of JLL Capital Markets, student housing remains resilient during economic downturns, given the consistent demand from the college-age population pursuing higher education amidst limited job opportunities.

Jason Doornbos, Executive Managing Director of Development at Landmark Properties, suggests that operators with reduced reliance on recycled capital may see better performance in 2024. Industry experts predict heightened transaction activity in the sector, as student housing investors and developers aim to maximize the promising returns and stable cash flows.

These evolving student housing trends and shifts in capital markets are prompting investors to adapt and strategize to address ongoing challenges and emerging trends. Despite these challenges, positive indicators such as strong enrollment numbers and increasing occupancy rates, coupled with rent growth, instill optimism among stakeholders. For property operators looking to seize these opportunities, now is the time to list with amber and put your property on the map.