US: From November 2022 to May of this year, the average rental cost for PBSA grew faster than rent prices for multifamily housing for the first time.
According to data released by RealPage, during that seven-month period. While student housing rents were 8.8 per cent higher, on average, year over year, multifamily rents were up by just 4.5 per cent. As a result, some students are being priced out of apartments that were designed specifically for them.
The trend seems to coincide with students returning to in-person classes after the COVID-19–related closures of 2020 and 2021. After stagnating during the pandemic, year-over-year rental increases for student housing first began to grow again in early 2021, as did rental increases for multifamily housing. But the latter increased rapidly at first and are now slowing significantly, while student rents continue to climb.
Carl Whitaker, an economist with RealPage, said rental trends for student housing are essentially mimicking trends that conventional multifamily real estate went through months ago, and he expects the disparity between the two markets to even out by 2025 at the latest. “What’s happening in student [housing] is basically the delayed trend that you’re seeing in conventional,” he said.
Peter Blutreich, who facilitates partnerships at Rent College Pads, a platform dedicated to helping students find off-campus housing, cited factors that could have contributed to high rental prices for student housing. Closures and the high price of materials slowed construction of both off-campus and on-campus housing during the pandemic, so when students returned to campus in 2021 and 2022, their options were limited. Additionally, some colleges have admitted larger freshman classes than they did before the pandemic, forcing more students to live off campus.
“It was a perfect storm coming out of COVID for the institutional settings and institutional markets,” said Blutreich.
