Colliers: Private student housing rental market will grow in the coming years. Accommodation costs between 150 and 300 euro per month

Demand for private student rental housing is growing in the Central and Eastern Europe (CEE) region, in all six major economies of Romania, Hungary, the Czech Republic, Slovakia, Bulgaria and Poland, Colliers consultants note, and this trend attracts the attention of major investors.

Until 2021, the Czech Republic and Poland were the main targets of investors, but since last year, some of them have expanded their activities to Romania and Serbia, where they are already developing residential projects exclusively for rent. There are about 2,500 private student dormitory accommodation units in Bucharest, similar to the Czech Republic, for example, which has only half the number of students in Romania. Accommodation costs between 150 and 300 euros, depending on the number of rooms and the comfort conditions offered.

The private student accommodation market is rapidly expanding in the CEE-6 countries, and Romania, where there are almost 600,000 students, is following this growth trend. In Bucharest alone, there are around 175,000 students attending different faculties, but the supply of available accommodation for them is limited, thus private dormitories are an alternative accommodation solution that can meet the growing demand. University dormitory accommodation does not exceed 40,000 places, while about 2,500 places are available in private homes.

“After two years of pandemic, when university courses were held remotely and the student accommodation market was practically frozen, 2022 marked a return to pre-pandemic normality. In the context of this development, the PBSA (Purpose Built Student Accommodation) segment in Bucharest and the CEE region experienced significant changes and opportunities. It is obvious that there is a high demand for private accommodation in Bucharest, offering students modern and flexible accommodation options, and it is also clear that there is a growing interest of investors in this segment, actively looking for the best development opportunities available on the local market. Private households still remain a relatively new sector throughout the region. Poland, which has over 5,100 such units, Romania, where there are already around 2,500 units in Bucharest, and the Czech Republic, with over 2,100 units, lead in this segment of the real estate market”, points out Gabriel Blăniță, Associate Director Valuation & Advisory Services at Colliers Romania.

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Student accommodation availability and quality in the CEE region varies by country and city, Colliers data shows, with large cities and university centres offering the most options, both in terms of public and private housing. Last year, the CEE-6 region registered almost 2.7 million students, of which 9.5% came from abroad, with two-thirds studying in Poland and Romania. More exactly, 1.2 million students attend university in Poland, while almost 600,000 students study in Romania, most of them in the capital.

“Rental prices for private student accommodation in the CEE region range from between 150 and just over 700 euro per month, with an average of around 300 euro per month. In Bucharest, prices are at the lower end of this range, starting at a rent of around 150 euro and rising to over 300 euro for a single room. Given the considerable number of students in the big university centres, there is an availability problem in student accommodation. Thus, students are looking for alternative accommodation, putting pressure on the residential rental market especially during the August-September period, the most sought-after units being generally the smallest accommodation, but also apartments they can share with other colleagues. This development indicates a huge potential in the CEE countries for the private student housing segment”, says  Gabriel Blăniță.

The development of the residential for rent segment is already an ongoing trend among specialists. Colliers’ consultants are currently in discussions with several developers and investors regarding the construction of build-to-rent projects in several areas of Bucharest. The development potential for this sector reaches around 5,000 units in Bucharest in the next 2-3 years. So far, the demand of this type has been covered almost exclusively by small investors, who have bought one to three apartments for investment purposes, for renting.