Short on time? Here are the highlights:
- A global tracking study finds that student accommodation costs are highest in major US, UK, and Australian destinations
- These findings echo those of other recent studies that aim to measure the relative affordability of various study destinations
- Also reinforced in the study is that the availability of purpose-built student housing is key to driving down average rental costs
A new analysis from Student.com aims to map the cost of living across a wide field of city destinations. All told, the sample included bookings in 92 cities, albeit primarily in the world’s top three study destinations: the US, UK, and Australia. Student.com analysed bookings of 40 or more weeks for more than 8,000 students from the period 1 November 2015 through 31 October 2016. All costs were converted into a common currency – US dollars – based on the exchange rate at the time.
As we have observed in earlier coverage, affordability is a major decision factor for prospective students and cost of living accounts for a significant proportion of total student spending.
An accompanying commentary from Student.com reinforces the point: “More often than not, we speak to students who are deciding between two or three different cities. Naturally, living costs are one of the main factors they take into account when they come to making a decision.”
Student.com found that the average weekly accommodation spend for the international students in the study was US$218. Not surprisingly, housing costs were higher in larger cities, but of course that is also where large populations of visiting students are concentrated.
As the following chart reflects, New York City was ranked as the most expensive city in the study, with students spending nearly double the global average for accommodation. Other major US and UK destinations – Boston, London, and Washington – follow close behind with weekly average rents again well above the global benchmark.
At the national level, the average weekly spend in Australia was highest, at 23% above the global average.
Average weekly rent spend in the top ten most expensive cities in the Student.com sample. Source: Student.com
These latest findings largely follow the observations made in another significant cost tracking study from global real estate services firm Savills. It too found that major centres in the US and UK were among the world’s most expensive. The Savills study took that analysis a couple of steps further by also factoring in values for international tuition rates, and by drawing comparison with a wider field of study destinations in Europe and Asia.
Savills highlights that the significant cost differentials from country to country explains in part why destinations such as Germany and China have earned an increasing share of internationally mobile students in recent years. Paul Tostevin, associate director of Savills research, observed at the time: “Certain cities have a clear affordability advantage, offering huge potential when it comes to attracting mobile students seeking a lower cost education. Although at the moment the majority of students are still heading to more expensive institutions we expect the trickle of students choosing value over traditional reputation to increase – particularly when so many of the universities in these cheaper cities now have the credentials to rival the old bastions of education.”
Aside from the growing strength of institutions in alternate destinations, the other important trend to watch here is the availability of housing, and purpose-built student housing in particular, in major city destinations.
Student.com points out that, “Across Australia, the UK and the US, cities with larger supplies of purpose-built student accommodation (PBSA) tend to be more affordable than cities that are under supplied.” This underscores the importance of the large-scale private equity investments that are now helping to expand the stock of student housing in major destinations, including those in the US, UK, and Australia.
New York or London will always be more expensive than Tallahassee or Sheffield, but expanded purpose-built housing stock could certainly help to drive those averages closer together over time.
For additional background, please see: