European destinations attracting more international students amid continuing housing challenges
- A shortage of student housing continues to be a major issue in leading study abroad destinations in North America and Europe
- Rising costs of construction, super-charged tourism activity, and lack of funding are key reasons that PBSA supply so stubbornly lags demand
Many European countries have welcomed more students than ever over the past few years (e.g., Germany, France, Spain, Switzerland, and Ireland). International students are drawn to quality education and to lower tuition relative to the leading destinations of Australia, Canada, UK, and US (aka the “Big Four”). But in Europe, students often face the same kind of issue as do students in the Big Four: insufficient purpose-built student housing (PBSA) and expensive rental fees.
Last year, there was a shortage of 3 million beds for students across Europe and the situation is expected to worsen in the next five years, when there will be a need for an additional 200,000 more beds, according to a 2024 analysis by global real estate firm JLL. This is in part because Europe’s student population is expected to grow by 10% by 2030/31, reaching 23.5 million, with half being international students.
Top student cities in Europe are the worst off in terms of supply, with 40 cities accounting for 40% of the 3-million bed shortage.
Only 40% of PBSA beds across Europe are privately funded. The rest are publicly owned or subsidised and not always accommodating of all types of students/budgets. The situation, says JLL, equates to a “€450bn investment opportunity.”
As it stands, most PBSA investment in Europe is in the UK, and JJL observes that “key markets in continental Europe would need to grow, on average, 13 times to match the UK 2018-2022 [investment] average.” For example:
“The largest student markets like Germany and France could see their investment grow from an average of €0.5bn to €7bn necessary to meet unmet demand. In more nascent markets like Italy, at the current pace of investment it would take over 100 years to deploy the necessary investment.”
To narrow the gap between supply and demand, Dominika Mocova, a senior analyst at JLL EMEA Living and Research Strategy, says: “Greater market transparency and understanding from planning authorities is necessary to unlock the full potential.”
Her colleague Julia Martin, JLL’s head of EMEA Student Housing, points out that PBSA is part of ensuring a good student experience: “The affordability and provision of a well-rounded student experience continues to set PBSA apart from traditional rental accommodation.”
Ms Martin continues:
“With developers now having a better grasp of the cultural nuances and design requirements through the different European countries, they are set to introduce the next generation of fit-for-purpose schemes, aimed at addressing the growing demographic student population as well as rising international student demand for quality accommodation across Europe. The continent is now home to the highest number of globally ranked universities, with 203 universities in the top 500 according to the 2024 QS World University Ranking. Given the current shortage of student accommodation in key cities and the vast untapped potential in countries such as Italy and Germany, addressing the standing imbalance between supply and demand will unlock a huge €450 billion growth opportunity in the market, with PBSA playing a crucial role.”
Ireland: Construction causing delays
In 2024, Ireland’s education department examined the student housing situation in a paper called Funding the Future: An Annual Options Paper on the Cost of Higher Education 2024. It found that:
“On average there are three applications for every one student bed on campus. This does not take into account the Technological University sector. Those students who are unsuccessful in obtaining a place are forced into the private market.”
As reported in The Irish Times:
“Construction cost increases, fuelled by the Russian invasion of Ukraine, Brexit and Covid, are having a significant impact on the supply and affordability of new rental accommodation for higher-level students … The impact on supply has been significant, with more than 10,900 units with planning permission within the university public and private student accommodation sector not having been activated.”
France: Danger of dropouts and student hardships
In Paris, a January 2024 study by SeLoger.com found that the number of available rentals for students in Paris dropped by 50% compared with 2023 and 73% over three years. Jacques Baudrier, deputy mayor for housing, told The Diplomat: “The private sector has nothing left to rent, agencies are closing, and the crisis is exponential.”
Barbara Gomes, delegate for Tenant Protection in Paris, explained:
“If you can’t find housing, you give up your studies or move farther away, and the longer commutes add to fatigue. More than half of the students work part-time, and the risk of academic failure increases with such challenges.”
Spain: Tourism overload
In Spain, where soaring tourist numbers are squeezing residents out of the housing market, the government is taking action to provide more student accommodation for students enrolling in certain types of tertiary institution. A protocol was signed at the end of 2024 by the ministries of housing, economy, and universities that mandates that new private universities offer housing for their students.
In addition, reports The Guardian, Prime Minister Pedro Sánchez’s government has instituted a tax of up to 100% on properties bought by non-residents from countries outside the EU, such as the UK. President Sánchez defended the new policy by noting:
“In 2023 alone non-EU residents bought about 27,000 houses and flats in Spain. And they didn’t do it to live in them, they didn’t do it for their families to have a place to live. They did it to speculate.”
A persistent and challenging issue in higher education
International students have enough to think about without worrying about whether they will find affordable housing on or at least near to campus. Housing stress is closely associated with poor mental health, and it means that affected students’ attention is often – and of necessity – elsewhere than in their studies. In extreme cases, housing issues can cause students to drop out.
Stephen Madsen, writing for EConsult Solutions, a US-based economics and policy thinktank, notes: “As the market continues to struggle with meeting the demand for affordable housing options, increasing on- or near-campus student housing can be an attractive amenity and marketable edge for universities looking to maintain or increase enrollment.”
But he also points out the sometimes-impossible solutions higher education institutions are up against:
“Ultimately, financing and development costs remain the largest hurdle in addressing this issue for many institutions. Public funding for universities has fallen in many states over the past several decades—limiting many institutions’ ability to take on additional debt for capital improvements. During the same period, the cost of residential construction has risen significantly. The combined effect leads to a challenging development environment for higher education institutions, absent outside equity or public subsidy.”
Mr Madsen provides several examples of US colleges working hard and thinking creatively to try to come up with solutions:
- “Middlebury College in Middlebury, VT is providing a stipend, or financial incentive of $10,000, to take a half-year leave of absence to upper classmen to accommodate housing for incoming students.
- In Knoxville, TN, the University of Tennessee has rented out local Knoxville hotels to accommodate incoming students.
- Virginia State University, in Petersburg, VA built on-campus modular developments to house incoming students.”
Mr Madsen concludes: “For [institutions] looking to ensure an affordable and inclusive education, the housing issue must continue to be addressed.”
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