The student housing sector has had great momentum over the last few years as it has seen record breaking construction and occupancy numbers. With another big year behind us and a new year ahead of us, we are looking into what made the 2015 student housing sector successful and what’s ahead for 2016.
A college education is becoming increasingly important, therefore enrollment is growing by the thousands adding a significant increase in housing demand. Larger universities are experiencing high enrollment numbers but not enough supply for incoming students. Furthermore, universities that require first year students to reside in on-campus housing have been averaging a 104% occupancy in 2015.
With the flood of student housing starts in 2015, developers really amped up the standard amenity package. Student housing communities are fulfilling students’ active and social lifestyles with enhanced fitness centers complete with pilates and spin rooms, game rooms equipped with gaming systems and big screen TVs, as well as study areas with high speed internet and brand new technology. Because developers delivered a product that didn’t previously exist, the new units were easily and quickly absorbed over 2015.
As 2015 ended on a high note for student housing, the new year brings big promises for a busy and successful 2016. Even more students are expected to enroll this year. Axiometrics is forecasting an increase of over 200,000 new students for Fall 2016. This will help balance the supply and demand and support the strong rent growth we have seen over the last year. An additional 38,000 new student housing beds are expected to hit the market Fall 2016 to house the flood of new students, and that number is likely to grow over the next 12 months.