Africa’s Student Accommodation Crisis Is Deepening, and Private Investors Hold the Key to Unlocking 500,000 Missing Beds

Ezra Rasethe, CEO of investRand

South Africa is heading towards one of the most significant surges in student accommodation in decades. The country’s universities currently face an estimated deficit of more than 500,000 beds, a shortage confirmed by sector analysts and echoed strongly at the 7th Annual Affordable Student Housing Summit. This supply gap is widening as more students migrate from rural areas and smaller towns into urban centres for higher education. Yet, despite this swelling demand, universities cannot build or refurbish residences fast enough to match the enrolment curve.

This is why the private student accommodation market, both large-scale developers and individual investors, is becoming the backbone of the sector’s future. The conference made this clear: the market is moving into “greener zones,” not because competition is low, but because the demand fundamentals are unshakeable. Students will continue to move to cities. Universities will continue to run out of space. And investors who can deliver quality, sustainable accommodation will continue to fill the gap.

The prognosis for 2026 is overwhelmingly positive. Students across Africa and South Africa are pursuing higher education at accelerating rates, fuelled by growing access to digital learning tools and increased emphasis on tertiary qualifications. Even with a high volume of privately owned residences entering the market, demand still outpaces supply, a trend expected to continue for years.

What’s driving this?

Public institutions cannot keep up with demand. Universities lack the capital and capacity to build at scale, contributing to the 500,000-bed national deficit, and student needs are changing fast.

Today’s students expect:

- Uninterrupted electricity (solar, backup systems, generators)

- High-speed Wi-Fi

- Reliable water supply (rainwater harvesting, backup tanks, boreholes)

- Safe, well-managed communities

- Modern design and dedicated study areas

This shift means demand is not just for space, but for *quality* space—and private investors are best placed to meet it.

1. Cash-paying and NSFAS-funded students both fuel demand

- NSFAS students: ±R5,200 per month per accredited bed

- Cash-paying students: R3,000–R6,000 per month depending on amenities

This dual demand creates resilience even when NSFAS payment cycles are delayed.

While the opportunity is undeniable, the conference also revealed an equally important truth: only well-run properties will truly thrive.

Investors must manage:

- Stable tenanting processes

- Operational expenditure

- Capital expenditure

- Cash flow during payment delays

Margins are tight in student housing, meaning the winners will be those who innovate and operate sustainably.

But the upside remains substantial. There is no shortage of students, and no indication that the demand curve will flatten. The sector is evolving and becoming more sophisticated, and investors who build robust, sustainable, well-managed properties will see strong, consistent returns.

Private developers across the continent are reporting rising enrolment, improved digital access, and an urgent need for modern living spaces. Student housing is no longer seen as “just rooms”; it is now a critical infrastructure asset class.

At the conference, investors emphasised that this trend is not limited to South Africa. Across Africa, demand is lifting, innovation is increasing, and student housing is being recognised as a long-term, resilient investment category.

The theme of the conference was clear: Collaborate, Build, Deliver, Excel.

To close the 500,000-bed gap, three parties must work as one:

- Private landlords and developers

- Universities and NSFAS

- Accreditation bodies, architects, digital providers, and service operators

From municipal structures to property managers, the entire ecosystem must work together to produce scalable, sustainable solutions.

The student accommodation sector is evolving rapidly, with vast opportunities for innovation. Everything from digital integration to green energy and water independence will shape the next generation of student living. The market is open, lucrative, and ready for investors who are prepared to deliver resilient, modern and safe accommodations for students.

South Africa’s growing education sector depends on it, and with a national deficit of 500,000 beds, the window for investors has never been stronger.

investRand empowers working professionals to grow their wealth through informed property investments, without the hassle, confusion, or excessive risk. Whether you're a first-time investor or expanding your portfolio, our platform provides a curated selection of high-quality investment properties that align with your financial objectives. If you are interested in talking to us to accompany you on your property investment journey, please book your free discovery call below.

Book A Call