Student Housing, Home Away From Home: An Emerging Trend In Indian Real Estate
Student Housing in India gives pace to the steady and fastest-growing economy globally, is also home to the second-largest post-secondary education pursuing student population in India. The current gross enrollment ratio (GER) in post-secondary education is 26.3% (MHRD, 2019). This accounts for students who are both day scholars and hostlers. Hostelers are typically the students who migrate to other places to seek their higher education or even a job. Given such a scenario of high enrollment, there is an increasing need for housing facilities other than the universities’ popular hostels. Student Housing can efficiently cater to this.
Student housing/purpose-built student accommodation (PBSA) provides millennials with basic amenities like food, electricity, WiFi, and others required for their livelihood. These student housing accommodations are of high quality, security, and, more importantly, affordable to the common man.
Reasons for an Increase in Demand for the Student Housing in India?
With rising enrolment, rapid intra- and inter-state student mobility, and an influx of international students, there is a greater demand for high-quality accommodations. Although higher education institutes (HEIs) provide on-campus housing, the demand-supply gap is greater than the institutes’ capacity. This has compelled students to consider housing options outside of campus. The following are the major factors driving the growth of student housing in India.
Student Enrollment is Growing
India has the world’s largest population of people aged 5 to 24. (about 500 million). Although the age of the student cohort varies by state, the college-going population is expected to reach 140 million by 2030. (Higher Education in India: Vision 2030, EY). According to the All India Survey on Higher Education (2018-2019), 37 million students are currently enrolled in 993 universities and 50 thousand plus colleges and stand-alone institutions in India.
‘Study in India’ initiative by the Government
In the 2019 Union Budget, the Government announced its plan to attract 200,000 NRI students to study in Indian universities under the ‘Study in India’ initiative. With regulatory measures enabling the number of students on the country’s college campuses to witness a hike, the demand for trustworthy student housing on par with global quality standards started to hit an all-time high.
The two major cities with the highest number of migrant students are Bangalore and Pune. Bangalore, being the center of the Silicon Valley of India, attracts a massive population of migrant students annually owing to a more significant number of colleges located in the vicinity and tremendous employment opportunities.
There is also ver 40 thousand international students from 164 countries are enrolled in various Indian colleges. In addition, in 2018, the government launched the “Study in India” campaign to provide high-quality education to international students at a low cost. In India, this is expected to attract nearly 2 lakh students. However, with an increasing GER and only 6.54 million hostel beds available for 37 million higher education enrollees, there are only 6.54 million hostel beds available.
Pune is a unique market where most, i.e., 90% of the colleges are privately owned, building a private-owned student accommodation market. As more millennial-aged students gather in city centers, there is a more significant stress on the existing supply of student housing.
Lack of Campus Hostels and Facilities
The number of students studying at colleges and universities and the number of students able to acquire campus hostel facilities is extremely disproportionate, with the latter accounting for as little as 20% of the total volume. The scenario being such, students are mostly forced to look for private accommodation facilities around campus, which they typically do with the help of property brokers. Even then, it’s not very common that students to find housing that aligns with their preferences and taste. It is here that student housing managed marketplaces are finding their ways.
Hassle-free Housing Option
A large part of the target demographic holds a more globalized outlook, and people need not have to put up with overbearing landlords and sub-agents. They impose arbitrary regulations on their lifestyle. These rules can range from impositions such as night curfew and policy against overnight guests to being prohibited from inviting friends from the opposite gender, so on and so forth. Thus, today’s students prefer to opt for student housing, which allows them to live independently with dignity.
Amenities and Affordability
Students need to be provided with basic amenities such as food, electricity, WiFi, and security. The inclusion of other facilities such as laundry, transport, air conditioning can also be made available to students if they wish to opt for it. But unfortunately, due to the lack of supply of student accommodation spaces, students are left with no option but to live in tiny hostel rooms or PGs, which do not offer them all the amenities mentioned above that they require.
Student housing comes as a savior in such circumstances. It provides them with all the facilities that they require at a price convenient to them. Its design and architecture are kept quite comfortable and quirky, suiting the general needs and taste of students, unlike hostels and PGs. Thus, it started becoming an attractive option in the eyes of students.
All these factors contribute to the enormous growth of the student housing domain and the associated real estate sector in the country.
Nothing comes without a downside to it. A few general issues that the students complain about student housing are disturbing housemates, repairs, burglaries, dampness, an infestation of pests, sewerage problems, inadequate water supply, maintenance issues, so on, and so forth.
What are the emerging hotspots for student housing in India?
There is a strong demand for building student living facilities across India, whether it is due to increased inter-state mobility or an expanding college-going student cohort. The state with the most colleges in Uttar Pradesh, which is followed by Maharashtra and Karnataka. When it comes to the districts with the most academic institutes, Bengaluru ranks first, followed by Jaipur, Hyderabad, and Pune (CBRE-SAPFI 2019 Report).
As a result, metro cities, as well as a few Tier II and III cities that have evolved into premium education hubs, are playing a critical role in bolstering student housing in India.
- Bengaluru: Karnataka has emerged as a leading IT-ITeS and educational hub over the years. It is the only Indian state that has seen the greatest inflow of international students. The central, south and north-western parts of the city are densely packed with higher education institutes (HEIs), and as a result, have the highest enrollment ratio. As a result, there is a high demand for student housing options in these areas.
- Pune: Pune has emerged as a top education hub due to the availability of numerous premium institutes that cover almost every field of study, including literature, theatre, science, and law. It is also the reason why the city is dubbed the “Oxford of the East.” When it comes to student housing in India, particularly in Pune, the following areas are experiencing a significant increase in housing demand.
- Delhi-NCR: The national capital territory is home to some of the country’s top HEIs, including Delhi University, IIT, and GGSIPU, as well as dozens of well-known private institutions. These institutes are either centrally located or located along the Yamuna Expressway, Sohna Road, or Rohini. In addition, there are numerous coaching centers in areas such as Rajendra Nagar, Karol Bagh, and Mukherjee Nagar, which are fueling the demand for student housing in Delhi-NCR.
The Student Housing Market and Its Challenges
In India, student housing is a mainly disorganized and fragmented industry. While there are several benefits to investing in the business, it still confronts significant obstacles in terms of price and safety.
Students are now relocating to off-campus spaces with contemporary facilities in order to enjoy a higher level of life. However, shifting student expectations are increasing competition in the market, which is expected to alter average home costs across cities. Rent rates will rise as a result of this.
Developers are mindful of the dangers that come with this market. This involves the difficulties of selling inventories if the assets aren’t profitable. Furthermore, there is an opportunity cost associated with retaining real estate assets for a longer length of time.
But these issues can be resolved with proper communication with the management or the authorities. They cannot be considered as a principal concern to reject the concept of student housing altogether.
At present, there are only a few small first movers in this segment of PBSA in India. Most of the student housing companies have been incorporated within the past five years, hinting at a shift in the mindsets of developers of student housing. As the market for them remains mostly untouched in India, it offers both domestic and international developers and investors an excellent opportunity to come forward and start investing in student housing.
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Student Housing FAQs:
Student housing provides students with quality food, WiFi, electricity, and many other facilities. Its design and architecture are kept quite comfortable, suiting the needs of students. Whereas this is not the case with hostels and PGs as not many of them provide good facilities, quality food, comfort, and are neither safe.
The factors contributing to an increase in demand of the student housing sector are:
- Immigration of NRIs.
- Increasing numbers of students who seek to study and work in places other than their hometowns
- Lack of/ less number of the university built hostels
- Amenities and affordability
- Other key contributors include safety, security, comfort, and so on.