For years I have been an advocate for the construction of more purpose-built off-campus student housing. I saw student housing maturing from a shadow marketplace of home conversions into a big business opportunity for developers and professional managers of high-rise dwellings.
Not only were students and their parents demanding better quality housing near their schools, they were willing to pay top dollar for it. More than that, I could see that the market was expanding.
The examples of many university towns in the United States were showing the remarkable things that were possible, and although Canada sometimes lags behind America, I knew this was a trend we would follow.
Earlier this decade, I made a prediction: back when just 800,000 students were attending graduate or undergraduate programs full-time at the 82 universities across Canada, I predicted that this number would grow to over a million by 2021.
A 25 per cent growth in university enrollment within 10 years might seem ambitious, but it’s already happened. For the September 2013 academic year, universities across Canada announced a full time enrolment of 837,947 undergraduates and 151,410 graduates, or 989,357 full time students.
Trends have remained consistent
These trends have remained consistent across the country and over the past five years. While there has been some fluctuation from university to university, most institutions have received an average of two per cent enrollment growth each year since 2010. At this rate, we will pass a million full-time students by the end of this year.
Across Canada, more and more students are realizing the importance of a good education. They are staying in school longer. Savings incentive programs like the Registered Education Savings Plan have helped parents put away money for their children’s education.
And as the interest in higher education in Canada has increased, so too has the interest in Canadian purpose-built off-campus student housing.
Canadian universities are actively courting international students, who pay for the full cost of their education, and who are most in need for student housing. Today, fully 12.4% of all students attending a Canadian university are coming from outside of Canada. That’s represents more than 123,000 students.
Particularly prestigious schools such as the University of Toronto, McGill, the University of British Columbia and Saint Mary’s University in Nova Scotia have international enrollments as high as 20 to 25%.
And many Canadian students are choosing to attend universities outside their home town, picking high-quality student accommodations where they can find them. For parents and students, university represents the first real step towards independence, and student housing represents that critical first apartment. Students and parents want accommodations that are convenient, safe and address their educational needs.
What these trends mean is that, while thousands of new beds have been added to university towns like Waterloo and Toronto in the past four years, the market for student housing has grown even more, by around 20,000 full-time students. At least 550,000 students are looking for housing this year, and Canadian universities can only provide a bed for one in five.
Back in 2011, the student housing market was an excellent opportunity across Canada to serve a demographic that needed specialized housing, and was willing to pay for it. The opportunity is even stronger today.
The ROCK Canadian Apartment Symposium Series
The Canadian Apartment Symposium Series was held earlier this week in Toronto.
ROCK has helped organize four student housing conferences so far, and each has been a success. Hundreds of developers, builders, building owners, financiers and investors have shown up to learn from experts in the field of student housing about its potential and its many unique aspects. These conferences are an excellent way to meet with fellow business people, as well as municipal and university officials, and a lot of business gets done each year.
Back in 2011, I said that the only thing holding back the student housing market was a lack of knowledge of what was possible. Since then, developers, financiers and building managers have learned a lot, and thousands of new beds have been added to the marketplace. These developments have sold for some of the highest prices per square foot in the country.
This marketplace shows no sign of waning, however. There is plenty of opportunity still out there. You need only the knowledge and the expertise to go out and claim it.
Derek Lobo is the founder and CEO of SVN Rock Advisors Inc., a real estate brokerage with over 30 years of experience in helping investors make the most out of buying, selling, and renovating purpose-built apartment buildings. Learn more about SVN Rock Advisors Inc., Brokerage on their website at www.SVNRock.ca.