Student housing going fast

23 Nov 2009

If you or your children are studying in Cape Town and haven't sorted out accommodation for the 2010 academic year, you'd best get started because rental units are going fast.

Estate agents in Cape Town's southern suburbs say enquiries for rental units in suburbs like Rondebosch, Rosebank, Claremont, Mowbray and Newlands have been picking up steadily since September.

This is despite the option of campus residence, which becomes infra dig after first year.

Chorus Letting agent Paul Theunissen said they were definitely experiencing and increase in enquires for letting in the southern suburbs as students set themselves up for the next year.

Theunissen said most students preferred living near the institutions at which they were studying, with Rosebank and Rondebosch being most popular for Cape Peninsula University of Technology students, while University of Cape Town students looked in a range from the CBD to Wynberg in the south.

As to what parents or students could expect to pay, he said bachelor and one-bedroom flats would cost between R3k to R4k per month while two-bedroom apartments could go up to R7k per month.

Although many students had already signed leases for next year's accommodation, there were always latecomers.

"We are expecting the phones to ring off the hook from around January 4," he said.

Brenda Dickinson and Associates rental division director Taryn Hulne said the majority of leases starting in January 2010 would be finalised by the end of November.

Hulne said students and parents want to ensure that they've finalised these accommodation plans before they went home for their summer vacation.

She said there was also a lot of interest from foreign students who were going to be studying in Cape Town for post-graduate degrees or were on international exchange programmes.

IIFM agent Margi Bate said students were definitely one of the main drivers of the rental market in the southern suburbs.

Bates said they were usually busier from November until tertiary institutions opened in February the following year, and again in July due to foreign and post-graduate students picking up their tuition in the middle of the year.

She said she got enquiries from as far afield as Zimbabwe and Uganda.

She said one and two-bedroom apartments were popular among students, depending on whether they wanted to share accommodation or live alone.

Lewis Kennett, sales agent for Homenet/Harcourts Jon Rosenberg, says the Auckland Park area in Johannesburg has "without a doubt" seen a gargantuan upsurge in demand for student accommodation in November. The area is home to the University of Johannesburg and a stone's throw away from the University of Witwatersrand.

"As the varsities' student numbers grow, so the demand for accommodation grows. There is currently a real shortage of properties to meet this demand and we're only in November now.

"The demand is split according to the income of the student's parents. The students with wealthier parents are able to purchase and rent flats and townhouses to satisfy their need for privacy, while the poorer students tend to go for less expensive, communal accommodation," he says.

Bloemfontein's student housing market will also receive a boost with the launch of a new development set to be built next to the university campus.

Riaan Malan of the local Aida franchise says only about 5,000 of the 28,000 students at the University of the Free State can be accommodated in varsity residences. "That means that every year 23,000 students need accommodation, either at home in the city or in student housing, which represents a large percentage of our residential demand.

"Traditionally, students used to start looking for accommodation for the next academic year in November, but limited availability has seen prospective tenants putting their names on waiting lists earlier and earlier. This year we already had an extensive waiting list at the beginning of August."

Malan says the planned Uniloft apartment development opposite the campus will hopefully go some way to relieving the pressure on demand. "The developers are now just waiting for final rezoning approval and intend to start construction early next year, with the expected occupation date being January 2011."

He also says the developers are still negotiating final marketing prices in an effort to make units as affordable as possible, but that the 43sqm two-bedroom apartments are expected to be offered at prices between R600k and R700k.

"Investors can expect rentals of up to R5k a month if the units are let to two students."

The 370 units will be marketed off-plan and will feature high security as well as services specifically tailored to student living, such as laundry and recreational facilities. All units will be fully furnished. – Eugene Brink and West Cape News

Student Digs will beat commercial property

UK real estate forecast: 5% for student homes, almost zero for office blocks.
Knight Frank forecasts continued rental growth in student accommodation sector

Highlights

Rental growth in the student accommodation sector remains robust, recording growth of 5% per annum over the last six years, compared to 0.6% for commercial property. Substantially higher growth was achieved in key university towns over the last academic year.

Demand for university places continues to rise. Preliminary figures suggest a further increase in demand for places in the 2010/11 academic year, with UCAS reporting a 12% rise in applications at its October deadline.
As an asset class, the student accommodation sector is maturing and becoming recognised as an important element of the wider property investment market. Since mid 2009, there been increased demand for secure income producing assets and demonstrable yield compression.

Source: realestateweb