DALLAS, TX - Some 47,700 new beds are expected to come to market in privately-owned, purpose-built student housing properties in time for the Fall 2016 semester, with university markets in the Southeast region the primary target, according to Axiometrics, a provider of student housing and apartment market intelligence.
Meanwhile, the maturing real-estate sector continued its strong performance during the Fall 2016 leasing season.
Supply Going South
Seven of the 10 university markets expecting the most new supply this fall are in the Southeast or Southwest. Two are in the Midwest and one is in the Northeast Corridor.
To date, 43,800 new beds are scheduled for delivery in time for the Fall 2017 semester. The geographic spread of the university markets with the most anticipated new properties is much more diverse.
The new supply to be delivered this year is the third highest ever for privately-owned properties, behind 2014 and 2013.
"Though deliveries of new supply are not as high as they were a couple of years ago, demand remains strong, and students are generally absorbing the new beds," said Jay Denton, senior vice president of analytics for Axiometrics. "One thing that differentiates student housing from conventional apartments is that the distribution of new supply can change dramatically year to year. As construction near one school meets the demand, a building boom will begin in another university market."
Metrics Show Strong Performance
Rents and leasing velocity for the Fall 2016 leasing season both increased from Fall 2015.
"Privately-owned student housing is quickly becoming an integral sector in real estate, and performance metrics demonstrate its strength," Denton said. "Axiometrics forecasts rent growth to remain strong over the next five years and occupancy to stay above 95%, as enrollment continues to rise nationwide."
As has been the case, rents are higher the closer to campus a property is located. Effective rent growth was highest for properties one-half mile to one mile from campus.