Global report finds that demand for student housing is still far greater than supply

A new annual report from industry research specialists BONARD shows that the purpose-built student accommodation market (PBSA) in major study destinations had a high-performing year in 2024 thanks to strong international student demand. However, BONARD predicts that 2025 could see a pronounced shift towards more housing being built in alternative destinations:

“Political instability and new regulations in force in popular study destinations restricting access to international students could impact student housing operations. This is a concerning development for sector stakeholders in these destinations.

We can confidently say that the student housing sector is so severely undersupplied that a temporary decrease in the number of incoming international students would not have a substantial negative impact.

We do not expect international student demand to decline. However, we expect student flows to be redirected, to some extent, towards alternative study destinations – especially those offering a wide range of English-taught degrees. This could boost the development of the student housing sector in several countries.”

Highlights

• Nearly 65,000 new beds (student housing spaces) were completed across 131 cities.
• There was increased development in Southern Europe, especially in Spain, Italy, and Portugal. BONARD says this is likely the first sign of diverted student interest given immigration policies in Canada, Australia, and the UK.
• In most of the cities included in the report, the international student population increased in the 2023/2024 academic year, with an average of 2.8% growth.
• Rents increased more than in any year since 2018 (7.4% year-over-year on average), and occupancy rates were high (97% average).

Demand/supply gaps

Across most of Europe’s top study abroad destinations, there is more student demand for accommodation than there are available beds. As you can see from the screenshot below, the gap between demand and supply is by far the largest in London, England.

Development hotspots

Of the 323 cities BONARD surveyed, there was a 20% increase of student beds in the pipeline (i.e., either in the planning or construction stages). The city with the greatest demand-supply gap is also the city where the most development is happening: London. Following London is Paris, but its rate of growth is slower than it was in 2023. Most cities recorded growth, but there were some outliers: Lisbon and Berlin had fewer beds under construction, Milan and Stockholm had fewer beds planned, and Amsterdam slowed both in terms of planning and construction.

More growth expected, but affordability will determine how much

In the webinar associated with the report, a poll of the more than 1,000 participants from countries all over world found that the majority (55%) anticipate that average rental rates will go up between 3-7% in September 2025 relative to the 2023/2024 academic year.

However, property experts on the panel Jonathan Turnbull of Harrison Street, Alicia Edgar of Invesco, Joe Persechino of Yugo, and Pavlos Gennimatas of Hines also said that affordability may push that average more towards the low end of the spectrum.

For example, Mr Turnbull noted: “In Canada, we’re in a sort of awkward situation where the cost of rent is now higher than the cost of education, and so there’s a ‘sanity check’ issue that is happening with a lot of the domestic parents.” Mr Turnbull says there is resulting “pushback” and a bit of a plateau “that we’re going to need to think through in the next 12–24 months.”

The potential of a plateau was echoed by the other experts. Ms Edgar said that a significant proportion of international students are choosing alternative destinations because of affordability. There will always be a wealthy segment of international students whose families are willing to pay higher rents, she noted, but that is a small segment in the context of overall student demand for study abroad.

For additional background, please see:

• “European destinations attracting more international students amid continuing housing challenges”
• “Student housing crunch worsens across Europe, Australia, Canada”