Various studies have shown that there are more students than there are beds available in SA. Student housing has become an important growth industry with developers focusing on markets like Cape Town and Stellenbosch. While demand in traditional centres is high, competition is intense.
There are two towns that offer potential with significant demand for quality student accommodation: Gqeberha and George of which both are experiencing rapid student population growth, according to Just Property.
There are numerous institutions offering higher learning opportunities in Gqeberha. Among these, Nelson Mandela University, which has witnessed a notable increase in its student numbers. Its focus on creating a supportive and resource-rich environment, including establishing new transport systems and catering services, highlights the university’s proactive approach to managing its growth.
The broader implications of these developments indicate a sustained increase in its student numbers, presenting significant opportunities for investors in the student housing market in Gqeberha.
However, Nelson Mandela University has a satellite campus in George, situated at the foot of the Outeniqua Mountains, which focuses on education that supports the green economy and sustainable development. It offers a range of programmes primarily in the fields of natural resource management including forestry, agriculture, nature conservation, and game reserve management.
George is on the brink of significant educational expansion which will drive the demand for student housing. Plans are underway to establish a new university in the town. Additionally, George College is planning to expand its campus to accommodate more students and to offer a wider rage or programmes.
“The student housing market in Gqeberha and George presents a compelling opportunity,” says Mark Connett of Just Property Port Elizabeth Commercial. “There have been significant changes in recent years, driven by evolving educational needs, policy adjustments and the ever-increasing student population.”
According to a report by Nelson Mandela University (NMU), the shortage of on-campus housing has forced many students to seek off-campus accommodation, which often lacks proper regulation and security, comes at a high cost, and, often, is substandard. Many private landlords took advantage of the high demand, charging exorbitant rents for poorly maintained properties.
This has led to significant dissatisfaction among students, who have raised concerns about their safety and the affordability of such accommodations.
The rapid increase in student numbers has exacerbated these issues.
Recognising these challenges, local governments and educational institutions have implemented policies aimed at improving the student housing situation.
In Gqeberha, the municipality has adopted a comprehensive student accommodation policy that outlines standards for safety, affordability and quality of housing with the aim of regulating off-campus accommodation to ensure that students have access to decent living conditions.
Recognising these challenges, local governments and educational institutions have implemented policies aimed at improving the student housing situation.
In Gqeberha, the municipality has adopted a comprehensive student accommodation policy that outlines standards for safety, affordability and quality of housing with the aim of regulating off-campus accommodation to ensure that students have access to decent living conditions.
The Western Cape Government has conducted extensive studies on the housing market in George to identify gaps and opportunities. These studies have informed policy decisions, investment strategies and zoning regulations aimed at boosting the supply of quality student housing. Local government has integrated student housing considerations into its broader urban development plans. These policies focus on creating safe, affordable, and well-maintained housing options that meet the specific needs of students and encourage the development of purpose-built student accommodation (PBSA) to address the growing demand.
The changes in policies and the persistent demand for student housing present lucrative opportunities for investors in Gqeberha and George.
Purpose-built student accommodation (PBSA)
With new policies supporting such developments, investors can benefit from constructing dedicated student housing complexes that meet regulatory standards and cater specifically to students’ needs. These properties can offer amenities such as study areas, recreational facilities, and secure environments, making them attractive to students and their families.
Public-private partnerships
There is also potential for public-private partnerships (PPPs) in the student housing sector. Local governments and even educational institutions are increasingly open to collaborating with private investors to address the housing shortage. Such collaborations may even come with incentives that ensure long-term profitability.
Renovation and upgrading of existing properties
Of course, the opportunity exists in renovating and upgrading existing properties to meet the new standards set by local policies. Many off-campus accommodations require significant improvements to comply with safety and quality regulations. By investing in the refurbishment of these properties, there is potential to enhance their value and appeal to the student market.
Expansion into emerging markets
While Gqeberha and George are the primary focus of this article, there are emerging markets within the broader region that also present opportunities. Smaller towns and cities with growing educational institutions are experiencing similar housing shortages. Investors can tap into these markets early, establishing a presence and benefiting from the rising demand for student accommodations.
Sustainable and green housing solutions
With an increasing emphasis on sustainability, as educational institutions fill with GenZ, there is a growing market for eco-friendly student housing. Investors can differentiate their offerings by incorporating green building practices and energy-efficient designs. Such initiatives not only align with global sustainability trends but also appeal to environmentally conscious students and institutions.
Technology integration
Integrating technology into student housing can significantly enhance the living experience and attract tech-savvy students. Smart housing solutions, such as automated lighting, security systems, and high-speed internet, can set properties apart from traditional accommodations. Investors who embrace technological advancements can create innovative living spaces that cater to the modern student’s lifestyle.
The student housing market in Gqeberha and George is ripe with opportunities for investors. “Savvy investors willing to venture beyond the more crowded property landscapes of traditional educational strongholds are likely to be well rewarded,” concludes Mark.
