Student numbers appear to have peaked-supply shortage to continue in the near term
- The number of students in Germany reached a new record level of approx. 2.8m in the 2016/17 winter semester. The number of foreign students grew more rapidly than the domestic total.
- However, there is an end to the growth in sight. Almost a third of the 60 largest university cities registered stagnating or falling student numbers last year.
- Nevertheless, there remains an undersupply of student housing in almost all cities. The provision rate is approx. 11%.
- Development activity from private investors remains buoyant and focused on the major cities. Consequently, the provision rate in these cities is growing rapidly and, in some cases, will rise to more than 50% in the rental segment from €500 per month.
- The rapid growth in the student housing stock is creating investment opportunities, producing increasing transaction volumes. Investment in the sector this year is expected to total more than €1bn for the first time.
The student apartment market in Germany has passed the pioneering stage and is undergoing institutionalisation. At the same time, the supply is becoming increasingly differentiated but remains highly priced.Matti Schenk, Research Germany