Student Housing Surge: Why Smart Investors are eyeing SA’s Campus Boom

Top 3 Takeaways:

• SA faces a student housing deficit of over 500,000 beds demand is outpacing supply fast.
• High-quality, well-located Purpose-Built Student Accommodation (PBSA) is becoming the gold standard.
• Public-private partnerships are emerging as a sustainable way forward in solving the crisis.

A Market Under Pressure and Full of Potential

The demand for student accommodation in South Africa is soaring driven by increasing university enrolments, broader access to education, and a glaring national housing shortfall. As of 2025, more than 500,000student beds are still needed. Only 20% of students have access to on-campus housing, a stark contrast to the global average of 50%.

This demand imbalance is forcing rapid evolution in the student accommodation sector creating both a socio-economic concern and a golden investment opportunity.

A Sector in Flux - Challenges and Innovation Collide

Ebrahim Noor Mahomed, Head of Education at BDO South Africa, highlights how the student housing crisis goes beyond infrastructure:

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“The shortage of quality housing directly impacts student performance,wellbeing, and ultimately, South Africa’s broader socio-economic development.”

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Three Core Housing Types:

1. On-Campus Residences – Affordable and conveniently located, but ageing and often overcrowded.
2. Off-Campus Private Residences – Growing fast, offering modern amenities and security at premium prices.
3. Private Rentals – Offer independence but come with logistical, safety, and affordability challenges.

Cost Ranges:

• On-Campus: R20,000 - R60,000 annually
• Off-Campus Private: R30,000 - R100,000+ annually
• Private Rentals: R2,500 - R8,000/month, depending on location and sharing

Mahomedflags affordabilityas the key barrier, noting that rising costs often outstrip whatbursaries and financial aid can cover, especially for students fromlower-income backgrounds.

Key Challenges Identified:

• Severe supply-demand mismatch
• Crime and safety concerns in off-campus areas
• Deteriorating infrastructure and outdated facilities
• Budget constraints impacting future development

The World Bank’s SA Housing Report draws a direct link between housing quality and performance: students in quality housing average an 80% pass rate, versus 40% in poor conditions.

The Shift to Purpose-Built and Partnership Models

Despite the hurdles, positive shifts are happening.

• PBSA Growth: Developers are investing in smart, modern student-centric housing solutions.
• Green Innovation: Solar, greywater systems, and eco-designs are becoming standard.
• Tech Infrastructure: High-speed internet and remote learning facilities are now non-negotiable.
• Public-Private Partnerships (PPP): Joint efforts between universities, developers, and government are unlocking scalable solutions.

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“Strategic partnerships are essential to solving the student housing crisis sustainably,” says Mahomed.

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Investor Insight from the Ground: Retha van Rooyen

Retha van Rooyen, investor, author of Creating Wealth in Student Accommodation,and manager of 500 units across four cities, sees student housing as one of the most accessible, rewarding entry points for new property investors.

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“I’ve seen firsthand how high-demand student nodes can deliver strong yields - if you know where and how to start,” she says.

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Her Top 6 Tips for new investors:

1. Start with education: Know your legal and financial responsibilities.
2. Location is everything: Be near universities and transport routes.
3. Property choice matters: Look for homes with potential for multiple rooms and shared spaces.
4. Online learning matters: Include private study areas and strong Wi-Fi.
5. Budget smart: Plan for maintenance, vacancies, and upgrades.
6. Get out there: Network, research, and visit real student areas.

For more insights or to join her online course, click here

Final Word

Student accommodation in South Africa is no longer a niche it's a national priority and a massive market shift. As supply struggles to catch up with demand, smart investors and innovative developers are stepping in to bridge the gap.

If you’re serious about building long-term wealth while supporting SA’s future leaders, student housing deserves a spot in your portfolio.

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