5 reasons why student housing is the next big trend in the Indian real estate

Published: September 2, 2019 4:42:43 PM

Student housing is the one segment of the Indian real estate which has emerged virtually unscathed from the financial strain extending out of the NBFC crisis.

real estate, real estate in India, real estate investment, student housing, NBFC crisis, student housing indiaThe total addressable student housing market is comprised not only of the new-age domestic students but international students as well.

One of the pillars of modern civilization, universities in India annually register a throng of applications looking to fill vacancies left behind by graduating batches. However, the number of students studying at colleges and universities and the number of students able to access campus hostel facilities are extremely disproportionate, with the latter accounting for a meagre 20% of the total volume.

Against such a backdrop, students are mostly forced to look for private accommodation facilities around campus, which they typically find via property brokers. Even then, it is rare for students to find housing which aligns with their preferences and taste. It is here that student housing managed marketplaces are making waves in the Indian real estate sector by addressing the high-potential market.

Student housing is the one segment of the Indian real estate which has emerged virtually unscathed from the financial strain extending out of the NBFC crisis. Astride the following major trends, the Indian student housing market is going to register a steady upswing in the coming years:

1. Study in India initiative

In the 2019 Union Budget, the Government announced its plan to attract 200,000 overseas 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 an upsurge, the demand for reliable student housing that is on par with global quality standards will also hit an all-time high.

2. Acute deficiency of campus accommodation facilities

An estimated 35 million students are currently enrolled in higher education in India, of which only 20% are able to access accommodation services on their university campuses. This deficit has triggered the rise of a largely unorganised sector which is offering makeshift housing alternatives to students. These accommodation options lack uniform standards for rent, security, facilities offered, etc. This provides new-age managed marketplaces with the opportunity to enter the highly addressable market and fulfil the market gap through their holistic services.

3. Demand for convenient and hassle-free housing options

The total addressable student housing market is comprised not only of the new-age domestic students but international students as well. A large part of the target demographic, therefore, holds a more globalised outlook and is reluctant to put up with overbearing landlords and sub-agents who impose arbitrary regulations on their lifestyle. These can range from impositions such as night curfew and policy against overnight guests to being prohibited from inviting friends from the opposite gender, and so on. Thus, students today are increasingly preferring to opt for student housing which allows them to live independently and with dignity.

4. Demand for furnished housing amenities

A high proportion of students migrate to tier-1 and tier-2 cities such as New Delhi, Mumbai, Kolkata, Bangalore, Nagpur, etc. where major universities are located. During their college days, students prefer to live in fully-furnished, purpose-built housing which is conducive to their student-centric activities and lifestyle. On the other hand, semi or unfurnished private apartments require students to invest a disproportionate amount of time and effort to make the place liveable which eats into precious time which could otherwise be put to more constructive use.

5. Emergence of various market players

With new universities establishing a stronghold in tier-2 cities, new market players in the student housing sector have taken to the ‘lease and renew’ model. Supported by institutional investment from domestic parties, these developments are fast transforming the Indian real estate sector with the aim of meeting the growing demand for quality student housing.

The confluence of all these factors is responsible for the growth of the student housing segment and the real estate sector in the country at large. Given the current trends, it is on its way to becoming a key contributor to the nation’s GDP. As the saying goes, a rising tide raises all ships. The growth of the Indian student housing domain is also expected to play a critical role in rescuing the real estate sector from its ongoing slump.

(By Saurabh Arora, CEO & Co-founder, University Living)

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