New student property report released.
Student property has been in the spotlight across the UK for some time now, managing to welcome record investment levels in each of the last three years to help itself rise from the position of a niche option for buyers to a fantastic and popular way to spend money that has allowed itself to thrive thanks to high demand and promises of strong returns.
But according to the findings of a new study published this month by Savills, it’s not just the UK that has experienced such health in the past 12 months to two years. It said that across the world, student property investment has become a mainstream channel in the property market, leaving the notion of it being niche a distant memory.
While the focus has been mostly in the UK over the past few years, it’s important to also note that in the last 18 months, there has been a constantly increasing demand for property in an ever rising and improving property sector. And according to the Savills Spotlight: World Student Housing, this has meant a real spike in money spent.
The report states that in that time period, there has been a staggering level of investment. In 2015 alone, there were some $15 billion spent across the world, with the likes of Australia, Germany and the US following in the footsteps of the UK’s booming market to see investors flocking to student properties.
And although there has been a slight fall in the levels of investment in the first half of this year, Savills said this is only because of the large rise seen in the same period last year, indicating that 2016 remains strong in terms of sentiment towards student property investment.
While investment has risen across the world in general, another trend that it’s important to note is that more people are now buying as foreign investors in the UK and other nations. The Savills report states that over the past year and a half, we’ve seen an increase in the volume of people looking to capitalise on demand from students by buying in countries other than their own.
Overall, this has meant that in the past 18 months, some 40 per cent of global student property transactions have been carried out cross-border, showing that there’s a real demand from investors across the world and not just domestically, which really drives home the strength in the sector.
Student property opportunities
In any market in the property sector, one of the biggest concerns is that there will be an oversaturation in terms of stock, and that continued investment will mean a swell in available properties, leading to it outstripping demand and leaving investors out of pocket, so it’s encouraging that the Savills report shows that this is far from happening in student property.
Purpose built properties are the future of the market, and yet there is still a long way to go until such houses are widespread across the student sector.
Even in mature markets like the UK, there is still space for movement, with only 24 per cent of all students currently housed in homes that were specifically built with students in mind.
It’s the same story elsewhere as well, with Australia and Spain recording a provision rate of six per cent in this regard.
This represents a gap in the market for both investors and developers, who have a chance to take advantage of the demand for high quality student property built with students in mind.
Students now want something that meets their needs more than ever before, and the fact that less than a quarter currently live in such properties shows that there is still a real potential for the already booming market to go even further.
Interested in learning more about UK Student Property investment? Click here for instant access a new Q3 2016 Guide…