Market intelligence for international student recruitment from ICEF
21st Oct 2020

Student housing demand shifts to private rooms as sector adapts to pandemic

Short on time? Here are the highlights:
  • Traffic and booking data indicates a drop in international demand for student housing this year, with the decline varying considerably from destination to destination
  • Demand is shifting to private accommodations and new student housing developments are adjusting to incorporate a larger proportion of single-occupant rooms
  • The purpose-built student accommodation sector appears stable otherwise, with planned investments in new housing continuing, and forecasts for a return to strong student demand after the pandemic

A new analysis from housing marketplace Student.com and sector research specialists BONARD describes 2020 as "a year of change" in terms of how and when international students book student accommodation. Demand is shifting by destination and room type and students are also taking longer to confirm bookings this year — a trend we can imagine is influenced by the number of students deferring studies and/or those with uncertain programme start dates. At the same time, demand for study and housing abroad remains strong, and planned investments in new purpose-built student accommodation (PBSA) developments are largely expected to proceed this year, in 2021, and through 2022.

“What we have seen at Student.com is that the hunger for students around the world to study has not stopped, and COVID-19 has simply changed their plans somewhat, whether that is the end destination, their university city, or their start date, and even what type of student accommodation they book,” says Dan Baker, general manager, EMEA at Student.com.

Traffic and booking data from Student.com provides a window into the decline in international student enrolment in many destinations this year, with significant variances from market to market. Destinations such as Ireland and Spain are showing more modest declines in demand year-over-year – on the order of 12–20% – while others, such as the US, Germany, and France, have seen volumes fall more sharply (by as much as 75%).

And when students do book housing this year, they are more likely to book private rooms. “As expected, there has been a decline in the preference for shared rooms, which could be down to students wanting to self-isolate," adds Mr Baker. "There is also a growing trend of groups wanting to switch to single rooms, rather than their usual shared rooms. International students’ purchasing behaviour points to a 71% decrease in lower-cost bookings (below US$4,000 in value), which are mostly short-term which is in line with the decrease in summer study due to COVID-19 travel restrictions. A higher proportion of students are choosing to pay extra money for a private room."

The other trend that jumps out from the Student.com data is the longer interval observed between the student's initial inquiry and the point at which they confirm their booking. The Student.com sample shows a 11% increase in the proportion of students taking six months or longer to book a room, which reflects in turn the uncertainty many students are facing around visa processing, travel restrictions, programme starts, and even whether courses will be delivered online or in person.

Looking ahead, the expectation is for continuing strong demand for student housing, but Baker adds that, "Flexibility of higher education institutions and student accommodation providers [especially with respect to cancellation policies and move-in dates] will continue to be essential.”

Investment outlook stable

A related review from BONARD examined the stability of 5,600 PBSA facilities in 120 cities around the world. It found no divestments among those properties leading CEO Samuel Vetrak to conclude, “The sector has not lost its head after some initial uncertainty."

"We closely monitor the global student housing pipeline," he adds. "In Europe alone, we are tracking some 185 projects that are due to be completed in 2021, with an additional 95 projects set to open in 2022. What we see is that approximately 80% of these are likely to be delivered on time.”

They are also likely to be delivered with a higher-than-planned proportion of single-occupant rooms. BONARD adds that based on its discussions with dozens of leading developers and operators across the sector, "Changing booking trends in a room type (from shared to single) will be reflected and developers/operators will swiftly increase the ratio in favour of single rooms/studios, especially in their pipeline projects that are to be delivered [through 2022]."

The BONARD analysis concludes that the resilience of the sector is underpinned by continuing strong demand for study abroad, and that periods of economic downturn or uncertainty have historically been a driver for both domestic and international student mobility, resulting in "growing number of students pursuing their courses abroad."

“This is what happened in the early 90s, after 9/11, and during the Global Financial Crisis of 2008/09," concludes Mr Vetrak. "We have every reason to believe that the market will bounce back stronger once the pandemic is over."

For additional background, please see:

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