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Student accommodation struggling to ‘keep pace’ with demand

Purpose-built student accommodation (PBSA) continues to lag behind global demand, according to a new report from BONARD.

In general, student accommodation had a ‘high-performing’ year in 2024. Nearly 65,000 new beds were completed across 131 cities, with increased development across much of Southern Europe, including Spain, Italy and Portugal. Occupancy rates were high at 97% and rents increased more than in any year since 2018 (7.4% year-over-year).

Despite this growth, there continues to be a gap in supply and demand for beds, especially in the UK. Among Europe’s cities, London had the largest gap, with 83,239 more students than beds, significantly outpacing the next city, Bristol, with a gap of 21,961.

There is also concern over affordability. A poll of over 1000 people around the world found that 55% suspect average rents to increase in September of this year, compared to the 2023/24 academic year.

‘In Canada, we’re in a sort of awkward situation where the cost of rent is now higher than the cost of education,’ said property expert Jonathan Turnbull, speaking at a BONARD webinar. ‘There’s a “sanity check” issue that is happening with a lot of the domestic parents.’

For Canada, as well as Australia and the UK, immigration policies continue to divert interest to other study destinations, meaning 2025 could see more accommodation built elsewhere. The increased development in Southern Europe, BONARD says, is likely the first sign of this shift occurring:

‘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.’

Image courtesy of Duskfall Crew
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