South Africa’s ever-expanding tertiary education sector continues to drive strong demand for rental housing. Many investors are asking: “Is student accommodation a good investment? The answer is “yes, definitely”. There is a national shortage of student beds and growing university enrolments. This means student accommodation investment is a worthwhile idea.
The student accommodation shortage
Recent reports highlight that universities across South Africa are facing severe accommodation shortages, with thousands of students unable to secure on-campus housing as each new academic year dawns.
“For the 2026 academic year, the University of Johannesburg says it received close to 100,000 (99 472) student accommodation applications while its current on-campus bed capacity stands at 7 015 beds.” (Source)
“Nationally, the demand for student accommodation continues to outstrip university-owned capacity across the higher education sector. This remains a structural challenge.” – Dr Nell Ledwaba, senior director for Student Affairs, University of Johannesburg (Source)
This supply gap in the market has presented considerable investment opportunities for property investors offering secure, well-situated rentals near tertiary campuses.
Demand that extends beyond students
Student accommodation is in high demand, but it’s important to note that tertiary institutions also employ a large number of lecturers, researchers, and administrative staff. They all seek secure rentals near campuses too.
Buy-to-let properties near universities/colleges are therefore not limited to student tenants’ demand alone. Young lecturers, postgraduate researchers, medical department interns, and administrative staff are looking for affordable, convenient apartments close to work at campus.
For IGrow investors, this means a broader, more diversified tenant-demand group, not merely students.
This wider network of tenants reinforces why student accommodation investment is considered a worthwhile opportunity for a potential investor’s long-term strategy.
Why is student accommodation in such demand?
There are numerous reasons why investing in student accommodation in South Africa makes sense financially.
1. There is a persistent national shortage of student accommodation
South Africa, as a nation, faces a huge shortfall of student beds. As seen above, industry acknowledgements indicate that student accommodation demand exceeds supply. This is particularly evident in major tertiary education hubs such as Johannesburg, Pretoria, and Cape Town.
2. High occupancy rates are a plus factor!
Due to this undersupply of accommodation, well-situated student rental units tend to have reliable occupancy levels for investors.
3. Attractive rental yields are on offer
If you compare student accommodation investments to traditional residential rentals, student units create competitive yields. This is owing to strong rental demand and multi-tenant set-ups.
4. Annual rental intake is consistent
Every academic year brings a new influx of students and tertiary education and support staff seeking rentals. This ensures the consistency and the reliability of your tenants. This is a core reason why student accommodation investment opportunities are attractive even amid shifts in the broader economic landscape.
Prime IGrow student accommodation picks
The Kingsley | Mowbray, Cape Town
The Kingsley is only 750m from the University of Cape Town (UCT) main campus and is also close to other tertiary institutions, such as Varsity College in Rondebosch and the UCT academic hospital. These units are found in a prime location in one of South Africa’s largest academic nodes.
Tenant perks:
- Close to UCT’s main campus and surrounding colleges
- Secure, modern urban living
- Excellent transport access to the Jammie Shuttle and main roads and highways heading into the CBD.
Investor perks:
- A consistent rental demand from students and academic staff
- Capital growth potential is observable given this complex’s ideal, prime location
- These units are also in demand by young professionals, with Amazon headquarters and working hubs nearby.
Theresa Park | Akasia, Pretoria North
Theresa Park is centrally located in Akasia, Pretoria, near respected tertiary institutions, including:
- Belgium Campus iTversity
- Onderstepoort Veterinary Campus
- University of Pretoria Medical Campus
- University of Pretoria Main Campus
This makes it ideal not only for students but also for veterinary interns, medical trainees, lecturers, or hospital administrative staff.
Tenant perks:
- Secure, peaceful setting
- Convenience is a given with easy access to major academic and medical campuses
- Affordable rental rates
- Family-friendly for older students
Investor perks:
- A diverse tenant pool, including students and university employees, reduces the likelihood of tenant vacancies
- Strong rental demand in Pretoria North
- Affordable investment opportunity
Park Crescent | Akasia, Pretoria North
Park Crescent offers investors low-maintenance studio units ideal for both students and young working professionals near campus hubs. The complex is situated in Akasia, Pretoria.
Tenant perks:
- A safe living environment
- Community-friendly amenities
- Convenient location near education hubs
Investor perks:
- Attractive rental yields
- Immediate rental income potential
- These units are situated in a high-demand rental node
The View | Sandton, Johannesburg
The View in Sandton is found close to Varsity College and major commercial hubs, making it an attractive rental area to students and young working professionals alike.
Tenant perks:
- Close to Varsity College
- It has the Sandton City urban lifestyle appeal
- Modern, comfortable, and trendy apartment living
Investor perks:
- Strong rental demand from the student and corporate professional tenant pools, with Sandton’s business hub nearby
- This prime Sandton location will drive capital growth- a plus for investors
Fern Valley | Randburg, Johannesburg
Fern Valley is situated near Damelin College in Randburg, Johannesburg.
Tenant perks:
- The proximity to Damelin is a perk
- These units offer a secure residential environment
- There is easy access to public transport from the complex
Investor perks:
- Steady rental demand is a consideration for investors, as seen from students and academic staff tenants
- This is an affordable investment in an established suburb
Final Thoughts
When you ask yourself: Is student accommodation a good investment?
The data and market trends answer the question for you: “yes, undoubtedly.”
With tertiary institution enrolments on the rise, limited university housing available, and expanding employment within tertiary institutions driving the need for rental properties, student accommodation offers great investment potential.
For IGrow investors considering student accommodation in South Africa, the IGrow team provides support and access to strategically positioned, A-grade developments designed to meet market demand and deliver excellent ROI.
In South Africa, where the education sector is expanding, student and academic housing remains both relevant and essential. Student accommodation and education sector rentals are in demand. Investing in this sector is a winning move!
Contact an IGrow Wealth Investment Strategist today, and let’s discuss the student accommodation rental properties on our books that suit your investment needs.
