Key facts
- Hong Kong's government forecasts a 45% increase in annual demand for non-local student housing over the next decade.
- Non-local student enrolment in Hong Kong higher education is projected to reach 92,000 by 2027/28.
- An estimated shortfall of over 22,000 student beds is expected by 2027/28.
- Rental prices for private student accommodation have increased by 15% in the last 12 months.
- Chief Executive John Lee aims to double the quota for non-local students in subsidized post-secondary institutions to 40%.
Hong Kong is facing increasing pressure to expand its private housing supply to meet a projected surge in demand from non-local students. The government's Long-Term Housing Strategy progress report forecasts an annual demand of 2,310 flats for non-local students over the next decade, a 45% increase from previous estimates. This projection is driven by ambitious goals set by Chief Executive John Lee to double the quota for non-local students in subsidized post-secondary institutions to 40% and attract more foreign and mainland students.
Real estate firm JLL Hong Kong estimates that non-local enrolment in higher education will reach 92,000 by 2027/28, a nearly 50% rise from the 2022/23 academic year. This growth is attributed to Hong Kong's status as home to five of the world's top 100 universities. JLL anticipates that this will attract increased private investment in student housing.
The growing demand is already fueling upward pressure on rental rates. Oscar Chan, JLL's Head of Capital Markets, noted that rents in Y83, a major private student accommodation complex, have seen over 10% annual growth since 2022, reaching 15% in the last 12 months. Residential rents have increased by 7.0% since borders reopened in early 2023. JLL projects further growth in private student accommodation rents due to current undersupply and rapid growth in the non-local student population, identifying private student accommodation as a new investment property asset.
JLL warns that the widening gap between student housing supply and demand could hinder Hong Kong's expansion plans for its international student base. The overheated leasing market and escalating rents pose significant challenges to finding suitable and affordable private accommodation, potentially dissuading international students from choosing Hong Kong. The report emphasizes that goals for international enrolment growth must be matched by a similar expansion of student housing stock, a lesson learned by other global study destinations.