Student Housing Investment Opportunities Canada
Billions of investment dollars are flowing into the student housing markets in North America. Student housing in Vancouver is particularly attractive for a number of reasons.
With a low supply of student housing in Greater Vancouver along with growing demand for education services to foreign nationals, the potential for student housing investment has never been better.
Favorable Winds Blowing to Vancouver BC
A Canadian dollar now near 76 cents U.S. sweetens the possibilities for investors here in Vancouver. There’s a variety of other factors that make student hotel housing a compelling value.
The low availability of housing in Vancouver, Richmond and Burnaby is the prime driver of this investment opportunity. Tens of thousands students wanting to study in Vancouver cannot find suitable housing. The financial ability of families sending their kids here is solid. There is ability to pay and desperate need for units.
Student hotel owners and other education market based development can charge a big premium because availability is severely constrained.
The lack of suitable housing for students won’t get better anytime soon even as cheaper housing projects are announced. Hotel style housing is more attractive due to privacy, amenities, and location which means it is preferred.
Student hotel housing is a different grade from the regular condo investing you might be familiar with. It’s a special market requiring connections and experience for investors to capture the best ROI.
Student Hotel Condominium Development is growing along transit corridors such as Vancouver’s Skytrain
“Interest in student housing has been growing steadily, as more investors look towards less traditional asset classes within commercial real estate. Much more institutional capital has entered the student housing space as of late,” — from a report in realtor.org.
Why the Demand for Student Hotel Accommodation in Vancouver?
People around the world recognize the value of a University or college education in Canada. It can transform the lives of students fortunate enough to go to school here. With global economies doing well, there is desire and financial capability for families to send their kids to Canada for a world class education.
The immigration climate in the US is not positive and it’s increasingly expensive in the United States for foreign students. Canada has a more tolerant immigration policy which allows graduating students to stay in Canada longer, in order to gain practical work experience.
The US is Increasingly Undesirable for Many Foreign Students
Many students from Asia, South America and the Middle East prefer the more moderate climate the lower mainland in B.C. The lifestyle, dense residential and retail areas in Vancouver is further attractive and comfortable for them.
There are already hundreds of thousands of Asian students and immigrants in Vancouver. Richmond and Burnaby have the highest concentrations of Asian Nationals. This makes it further attractive to Chinese, Hong Kong, and Indonesian students and their families.
Big Investment Dollars Building Inventory
According to ARA Newmark Student Housing Group’s 2016 overview, $9.33 Billion of the 2016 total in the U.S. was directed toward the acquisition of investment-grade student housing assets priced above $10 million.
The US continues to be a lucrative market for real estate investment, however the lower Canadian dollar and flat property prices means student families and investors will be investigating the Vancouver market with more scrutiny.
The lower Canadian dollar means those visiting BC will find an “exploration vacation” here more financially acceptable. More foreign capital will likely come from countries including China, Russia, Israel, and the U.K. Increasingly wealthy, US investors may find Canada a very attractive target as well.
Colleges and Universities in Vancouver BC
Vancouver BC offers at least 12 colleges and universities serving a densely populated city. Capilano University, Emily Carr University, Fairleigh Dickinson University, Kwantlen Polytechnic University, New York Institute of Technology, Trinity Western University, Langara College, OMNI College, Simon Fraser University and The University of British Columbia (UBC) are the institutions most foreign students attend.
Some developers are building hotel condominiums with surprising amenities (mixed use developments too) within close distance of as many schools as possible. This ensures strong continuous demand from area students. It also ensures the highest rental prices from wealthy families who will compete for housing for their children.
Many of the families studying here, will also want to visit their children in Canada and some will rent or buy condo properties here too.
Student Hotel Housing is an exciting and vibrant sector and 2019 will be yet another interesting and busy one.
If you have question about Student hotel housing investment opportunities here in Vancouver, Richmond or Burnaby, please contact me via email or leave a phone message.