It is imperative that real estate developers act on the opportunities given by high demand and a low supply in the Nordic student housing market. Students within Nordic countries unfortunately have to face fundamental challenges stemming from this demand-supply gap in the student housing market. Sweden, Norway, Denmark, Finland, and Iceland are all affected by a widespread student housing shortage. The current availability of student housing is far too poor to meet the demand from the vast amount of students that enrol every semester, wanting to pursue higher education. Not finding accommodation will inevitably stand in the way of these young people’s future.  

Generally, students in the Nordic region have a higher income compared to other European countries. This is due to a few different factors, but one of them is that all Nordic countries provide higher education free of charge for their citizens. This enables students to pay a higher rent for their student accommodation, but the problem of availability remains. Given this situation, there's already a big opportunity in student housing investing, and investor activity in this asset class has been on the rise. 

The numbers below show that Sweden has the highest ratio of student housing per student. It should be noted that while Sweden shows the best availability, it still doesn’t satisfy market demand – resulting in higher costs borne by students in less advantageous living situations.

‍Percentage of student housing units in relation to full-time students: 

• Sweden 31% 
• Denmark 27% 
• Finland 21% 
• Norway 15% 
• Iceland 9%

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Nordic Student Housing Trends

• Construction of new and smaller student accommodations is increasing along with a larger focus on sustainability. 
• Higher demand for studio apartments compared to shared accommodation.  
• Increased interest in added services, housing communities, and co-living.  
• Putting quality over cost. Overall trend where students elect higher quality housing alternatives.  

Two points to touch upon from these are the demand for studio apartments yet simultaneous interest in housing communities. These prompt the question of how to reconcile the two — and the answer is to do both; have studio apartments but provide co-living amenities and services also for the sake of addressing well-being.‍

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Focusing on Small‍

Sharing apartments with others is generally not desired in Nordic countries, even though many students do share apartments today. It has been shown that students want small and affordable studio apartments that are close to campus or the city centre.

Student housing communities and services are increasingly becoming key factors that students ask for. To address this, developers should focus on adding value with common areas such as lounges, study rooms and shared kitchens for large gatherings and social events. ‍

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The Rise of Social issues‍

Nordic student housing operators are trying different ways to increase the well-being and health of their tenants. One way of addressing the issue is by focusing on creating a safe and private space for them. It is important that the students can interact with and support each other during a challenging time in their life. Providing spaces for fitness and recreational activities is also something that real estate developers should focus more on.  ‍

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Conclusion‍

There is a certain market characteristic that favours student housing investments. A steady flow of enrolment in college for example. Especially during recessions, where other markets go down, weak job markets and lack of employment opportunities, make people choose studies when times are bad. These are valuable trends for investments in the student housing market, given that it will only increase the demand for student housing – which is already at an all-time high.  

Investing in student housing is a relatively stable venture, but it boils down to how well you meet student lifestyle demands. Being a student is a special time in life and getting student housing shouldn’t stand in the way of building a future. As such, investments in the Nordic student housing market have great potential to help these students secure their needs and yield a good return.