08-06-2015, 08:18 PM
(This post was last modified: 08-06-2015, 08:44 PM by BuildingScout.)
I've been tracking student housing for over 25 years. At no point in time has there been a surplus in housing in that time period. To the contrary, we lived in a state of dire shortages. This makes the current more balanced situation look like an oversupply, but only because after a prolong drought the first rain feels like a deluge.
Back in 1990 prices were around $250-275 per room and they slowly moved up to $450-500 per room. Then the Luxe and other high end developments happened and prices jumped overnight to $500-750 per room. This took place at a time when there was no inflation, so this was a rather steep increase. Since then things have remained pretty much around that range, with not-as-desirable lower-priced units around $450 and anything nice and new at $550 and over.
Until the last two weeks that is, when, first, we saw the return of the sub-$400 units. I hadn't seen anything listed in that range outside of Summer sublets in over a decade, yet today Kijiji has a decent supply of Fall'2015 units going for under $400. High end developments have started offering selective one month's free rent, which amounts to a discount from $650-750 down to $600-700.
We should expect most of the jump to $750 to be given back over the next two years, since there is nothing justifying such a sharp increase. In other words, if construction is allowed to continue at this pace, as it should, I expect prices to pull back to a $450-500 per rent, with the upper end units going from $525-575, down from $650-750.
Back in 1990 prices were around $250-275 per room and they slowly moved up to $450-500 per room. Then the Luxe and other high end developments happened and prices jumped overnight to $500-750 per room. This took place at a time when there was no inflation, so this was a rather steep increase. Since then things have remained pretty much around that range, with not-as-desirable lower-priced units around $450 and anything nice and new at $550 and over.
Until the last two weeks that is, when, first, we saw the return of the sub-$400 units. I hadn't seen anything listed in that range outside of Summer sublets in over a decade, yet today Kijiji has a decent supply of Fall'2015 units going for under $400. High end developments have started offering selective one month's free rent, which amounts to a discount from $650-750 down to $600-700.
We should expect most of the jump to $750 to be given back over the next two years, since there is nothing justifying such a sharp increase. In other words, if construction is allowed to continue at this pace, as it should, I expect prices to pull back to a $450-500 per rent, with the upper end units going from $525-575, down from $650-750.