Student Housing Sector Continues Record-Breaking Performance
Despite a slowdown in activity across most asset classes, the student housing sector is still swimming against the current. According to a report by Yardi Matrix, the sector has continued its record-breaking performance in the first quarter of the year. Thereby, let’s dive deeper into the details.
Preleasing Rates and Rent Growth Surge
The biggest demand for student housing remains across more competitive universities with soaring enrollment rates. Reaching nearly 70 percent, the March preleasing rate at Yardi 200 universities outperformed last year’s historic high for the month. This rate is up 7.8 percent year-over-year, marking another record high for the month. Rent growth also surged, with a 7.0 percent increase since last year, reaching an average of $829 per bed in March—the highest rate on record for this month. Thus, proving there is a significant momentum of growth in terms of preleasing rates.
Heightened Construction Activity, but Sales Volume Decreases
As of early April, Yardi 200 universities had roughly 144,000 beds in various stages of development—up 20,000 beds since January. The pre-construction pipeline remained mostly unchanged through the first quarter of 2023, signaling a possible slowdown for the sector. The University of Texas at Austin had the largest under-construction pipeline, comprising 5,555 beds, representing 10.7 percent of enrollment.
However, prevailing setbacks in the general economy, such as high-interest rates and weakening investor sentiment, have affected development and sales activity. Despite an increase in bedrooms under construction since the previous quarter, pre-construction volume remained unchanged. Transaction volume in the first quarter of the year plummeted compared to the same period in 2022. Transaction volume at Yardi 200 added up to $148 million between January and March, with an average of $74,500 per bed, much lower than in the first quarter of 2022, when sales reached a total of $41.5 billion.
Show My Property’s Perspective on the Student Housing Sector
As a multifamily marketing agency, we’re thrilled to see the student housing sector continuing to break records. We believe this is due to universities’ constant growth and the increasing demand for off-campus housing. As preleasing rates and rent growth surge, we recommend that property managers invest in high-quality apartment marketing tools to capture the attention of potential student residents. Although sales volume has decreased, we believe that the sector’s construction activity will lead to more investment opportunities in the future.
The student housing sector is still breaking records, and we can’t wait to see what the future holds for this dynamic industry. If you’re looking for ways to stand out in this competitive market, Show My Property is here to help you with our top-notch student housing marketing solutions.
Checkout the official Yardi Matrix Report
Schedule a Demo
Make an appointment to speak with one of our business development executives to learn more about our creative marketing solutions. Contact – Show My Property
Multifamily Marketing News
Senior Housing Occupancy Rates Increase for 7th Consecutive Quarter
Using Google Analytics to Build a Multifamily Marketing Budget
Social Media Marketing for Apartments: Strategies For Success