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Understanding the Student Customer in the South African Student Accommodation Market

In our last article, "Student Accommodation Investing in South Africa: A Comprehensive Guide," we explored the key considerations and opportunities for investing in South African investment properties and real estate investments, with a specific focus on student accommodation. In this article, we will narrow our focus and discuss the importance of understanding the customer in the student accommodation market: the student.



Understanding the Student Customer


When it comes to student accommodation, the customer is the student, and it's essential to understand what makes them make decisions. Beyond the NSFAS accreditation requirements, such as lockable cupboards, microwave oven, bed, study desk, chair, study lamp, free Wi-Fi, common kitchen, and more, students need accessible, decent, safe, and academically conducive accommodation in South African universities. This is crucial for the economic, environmental, and social imperative and the success of our students, especially those from rural and poor backgrounds. Providing high-quality accommodation can also help reduce the 47% drop-out rate in the country.


Decision-Making Process


We hosted a focus group to understand how students make decisions about where to stay during their studies. It became apparent that students living off-campus and first-year students living on-campus hardly make decisions on their own regarding where to stay. Parents, guardians, relatives, siblings, and sponsors form part of the decision-making process, and security, property maintenance, transport provision to and from campus, and a conducive study area are the top considerations for them.


Preference for Different Types of Student Accommodation


The survey also revealed that the majority of students prefer to stay on-campus because of the convenience of walking to class and the library. However, some students prefer to live off-campus in private student accommodation (POSA) due to the freedom it provides them, such as less restrictive rules on visitors and the ability to move from one accommodation to another with relative ease if they are dissatisfied with the landlord. In fact, 55% of students prefer to live in POSAs, according to a survey conducted by the South African Institute of Race Relations (IRR).


The IRR survey also found that the demand for student housing in South Africa is expected to increase by over 290,000 beds by 2025. This demand is due to the fact that more students are attending higher education institutions, and the government's ability to meet the growing demand is limited. As a result, there is an excellent opportunity for investors to meet the growing demand for student accommodation.


Flexibility and Freedom



Students prefer flexibility and freedom when it comes to off-campus accommodation, particularly without curfews and rigid sleepover restrictions. However, students are not bothered by the prohibition of alcohol on the premises. Laundry facilities were also identified as one of the determining factors when selecting accommodation.


Different Needs for Undergraduate and Postgraduate Students


Undergraduate and postgraduate students have different housing needs. For example, first to third-year students are comfortable living in 2 to 3-sharing units, with anything above 3 considered a crowd and unattractive. Seniors or postgraduate students, on the other hand, have experience living independently and prefer single rooms with privacy and security ranking high in their decision-making process.


Market Segments


The South African student accommodation market is diverse, and investors need to understand the different market segments. For instance, the majority of students in public universities are undergraduates and funded by the National Student Financial Aid Scheme (NSFAS). They have limited financial resources, and their accommodation preferences are heavily influenced by their budget constraints. Therefore, investors should focus on providing affordable accommodation that meets their basic needs.


On the other hand, private universities and international students have a higher budget and may be willing to pay more for luxurious accommodation. They also have different preferences, such as proximity to campus, security, and access to social amenities.


Location is Key


Location is a critical factor to consider when investing in student accommodation. Proximity to the campus and other social amenities such as malls, restaurants, and public transport is essential. Students prefer accommodation that is within a reasonable walking distance or a short commute from campus. It is also important to consider the safety of the location and the availability of parking space.


In conclusion, investing in the South African student accommodation market requires a deep understanding of the needs and preferences of students, market segments, types of accommodation, and location. By providing affordable, secure, and comfortable accommodation that meets the academic and social needs of students, investors can tap into the potential of this growing market while contributing to the development of the country.


If you're interested in investing in student accommodation, whether it's an existing property, a house that can be converted, student flats, or purpose-built student accommodation, don't hesitate to contact us. Our team at investRand consultants is ready and excited to assist you in achieving successful investments in this growing market. Book a call with us today to discuss your options and begin your journey towards profitable student accommodation investments.



Disclaimer : None of the information contained here constitutes an offer (or solicitation of an offer) to make any investment, or to participate in any particular investment strategy. investRand does not take into account of your personal investment objectives, specific investment goals, specific needs or financial situation and makes no representation and assumes no liability to the accuracy or completeness of the information provided here.

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