Various studies have shown that there are more students than there are beds for them in South Africa. As a result, student housing has become an important growth industry.
Source: Supplied. Mark Connett of Just Property Port Elizabeth Commercial.
Developers have focused on markets like Cape Town and Stellenbosch, and while demand in traditional centres is certainly high, competition has become intense. However, there are two towns that offer potential with significant demand for quality student accommodation: Gqeberha (previously Port Elizabeth) and George.
Both are experiencing rapid student population growth, creating a pressing need for adequate student housing solutions.
There are a number of institutions offering higher learning opportunities in Gqeberha. Among these, Nelson Mandela University (NMU) has seen a notable increase in student numbers.
This growth is a reflection of the university’s expanding academic offerings and its reputation as a leading institution in the Eastern Cape.
NMU’s focus on creating a supportive and resource-rich environment for students, including establishing new transport systems and catering services, highlights the university’s proactive approach to managing this growth. These efforts ensure that students have access to essential services, thereby enhancing their overall university experience.
The broader implications of these developments indicate a sustained increase in student numbers at NMU, which presents significant opportunities for investors in the student housing market in Gqeberha.
However, few know that NMU has a satellite campus in George, situated at the foot of the Outeniqua Mountains in the Southern Cape. This campus focuses on providing 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.
And George is on the brink of significant educational expansion, which will further drive demand for student housing.
Plans are underway to establish a new university in the town, enhancing George’s position as an educational hub. Additionally, George College is planning to expand its campus to accommodate more students and offer a wider range of programs. These expansions will attract more students to the town, increasing the demand for student accommodation and presenting lucrative opportunities for investors.
“The student housing market in Gqeberha and George presents a compelling opportunity,” Mark Connett of Just Property Port Elizabeth Commercial says. “There have been significant changes in recent years, driven by evolving educational needs, policy adjustments and the ever-increasing student population.”
Opportunities for developers and investors
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 sub-standard.
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.
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:
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 Connett.
