- The return to face-to-face classrooms and the greater number of professionals working in a hybrid model has influenced the recovery of demand for this type of housing, which is aimed not only at students, but also at professionals seeking affordable housing options, such as apartment sharing.
With the advance of the vaccination campaign and the return to the classroom, many students this year have moved back to their cities of study to start a new school year. With this, student residences and shared apartments have also noticed the return to normality increasing their demand to accommodate all these students in various models and accommodation formats depending on the needs and budget of each student. But beyond students, these housing models also attract other audiences such as young professionals who share an apartment to save costs.
There is no doubt that accommodation for young professionals and students is experiencing a great recovery thanks to the return to the classroom and the office, even in hybrid format. For this reason, the Instituto de Valoraciones has analyzed the evolution of these housing formats:
Shared apartments, highly demanded by professionals and students and an investment option with high profitability possibilities.
The shared housing format is becoming more and more common, not only among students but also among young professionals. In fact, although it is true that rental prices have experienced downward adjustments in the last year, especially in major cities such as Madrid and Barcelona, the amount that young people who want to rent a home in these cities must pay is still very high compared to average salaries. According to the Emancipation Observatory of the Spanish Youth Council, in the second half of 2020, a young person who wanted to rent a home alone would have to spend 91.6% of his or her salary on this item. While the cost of sharing an apartment accounted for 27.8% of their income. Thus, given this situation, it is clear that the formula of renting a shared apartment is not only an option for university students, but also for a wide range of young salaried professionals who resort to this type of option to be able to emancipate themselves from their family homes.
In addition to the savings in rental costs that a shared apartment represents compared to a single dwelling or other formats such as student residences, shared apartments are a preferred option for many, as they allow greater freedom and flexibility in terms of schedules or rules of use.
For individuals or investors, investing in a property to rent it to students or young people in the form of a shared apartment is an option with high profitability possibilities. And the data prove it, taking into account that in the 2020-2021 academic year, there were, in the Community of Madrid alone, a total of 295,938 enrolled in the University at the undergraduate, cycle and master’s degree levels. Of those who study in Madrid, it is estimated that more than 30% come from a different community of residence, according to the University Student Statistics (EEU) for the 2020-2021 academic year published by the Ministry of Universities. This implies that at least 30% of enrolled students need to acquire housing in which to reside during their studies, and shared apartments are one of the main options.
Student residences, a format that is increasingly on the rise and in the investors’ sights
The 2021-2022 school year has brought with it a boom in residence halls. There are many cities in which the residences are full and even have waiting lists. They are presented as an ideal option due to their locations close to the study centers, in addition to the facilities they offer for meeting other students and the food, cleaning, laundry and common area services. The boom in student residences has been such that major investors have their sights set on this format. In fact, in the last year, important transactions have been closed to increase the number of places in these residences and to meet the existing demand.
This is a business model that, on the one hand, given its high demand, is associated with low risk as an investment product. On the other hand, it responds to the permanent need to provide accommodation for students who travel to other cities to study, offering them all the comforts and facilities. Such is the boom of this housing model that student residences are currently in the sights of both national and international investors and, in fact, in cities such as Madrid, Barcelona, Salamanca and Seville, several new construction projects are already being developed by large operators to offer more places in these accommodations and respond to the demand.
“Firstly, there is the interest of foreign students to stay in this type of housing, which allows them to get used to the cities and meet people, as well as greater flexibility in the contract than in the case of an apartment. In addition, it should be noted that international cultural exchanges are becoming more and more common and are recovering after the pandemic. And, on the other hand, the current situation, which places even more value on large and differentiated spaces in which to perform different daily functions such as study and leisure, in addition to compliance with certain hygiene standards, something that could also influence the increased interest of students to live in this type of property in which they have at their disposal catering and cleaning services, as well as common areas for leisure and study”, explains Mariola Soriano, Research Analyst at Valuation Institute. However, it should also be taken into account that the profitability of these assets depends on certain factors such as their location, which should be close to educational centers, the quality of the facilities or the number of vacancies they offer.