Student Housing: Next Big Thing in Indian Real Estate. Know why?

The student housing segment is witnessing a rapid growth of 36% across all the major markets in the country between 2019 to 2023.

The co-living concept is emerging in the Indian real estate sector.  The concept is now sneaking into the rental sector and will soon jostle for space in the traditional landlord- controlled rental environment. In India, the demand for higher education is on the continual rise as over 40% of our country’s population is below the age of 20. Therefore, there is a desperate need for quality, safe, and standardized accommodation in India.

A lot of colleges cannot provide on-campus accommodation, so many students resort to PG accommodation or private hostels. PGs are challenging to find, have poor security, and their quality varies from location to location and city to city. On the other hand, a majority of private hostels are scarce and therefore the reputed ones tend to fill up fast or are expensive. 

Students migrate across the urban side of India to seek quality education, which consists of two things, that is academics and student life. The latter is significantly impacted by where they live and how conducive their environment is for learning.

Here are some reasons why student housing is in more demand.

1)     Demand for student housing

Student housing has a vast market of over INR 20,000 Crore in India growing at a rate of 15%. It is predicted that the student housing beds that are used will be more than 16 million by 2024. There is a 4-5% increase in the number of students year-over-year.  Around 10% of increases in migration as a student are moving to education hubs for better education. Also, there is been rising disposable incomes, inter-city migration, and global exposure. Just 33% of the enrolled students get access to campus accommodation services. This gap between the demand and supply of this service has led to the emergence of the student housing market in India.

2)     Cost Difference

The organized player in the market charges typically 20-25% above the unorganized sector. But, there are better amenities that are being provided like food, 24*7 securities, daily housekeeping, a TV lounge, a common/ games room, and much more. The organized approach enables both economies of scale and increasing utility per/square foot.

3)     Size Difference

An organized player will have 75-100 or even more students in one location, while an unorganized player is closer to 30-35 students. This allows the organized operators to provide add on facilities and will give better fit-outs in the rooms, like thicker mattresses, larger beds, larger cupboards, use quality food ingredients, and high security. There is a nominally higher price from an unorganized operator. The unorganized sector will always be there, as there is still a highly price-sensitive customer. Some move towards the organized sector due to increasing exposure, improving regulation, and demand for better services. One can expect the organized players to scoop up somewhere between 50-60% of the market in the top 20 cities over the next 3-5 years.

From the above scenario, you must have come to know that there is a desperate need for student housing in India. Staying at a safe, comfortable environment with like-minded residents is something that every student is entitled to. The co-living space that seemed earlier an unorganized sector is now transforming.

Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. Propertypistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information

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