6% rental yield is already the top? :P

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Education is an evergreen industry. This is true even if everyone kept saying that what we learnt in the university may not be that relevant to the working world of today. Well, try applying to 10 different jobs which require degree and you do not have one. Someone will then point out that long time ago so and so and so also did not have a degree and they were successful. Cool. Unless we have built a time machine, let’s just focus on today and the future yeah. How do we take advantage of the education industry then? Well, property investments revolving around student accommodation may come into play. How much are we expecting? Perhaps 5% or higher? Well, 6% rental yield should be good enough. The two top countries with student housing yields have that.

Article in edgeprop.my here. Australia and Poland currently offer the highest prime net student housing yield at 6%, according to global property firm Savills in their latest “Global Student Housing Investment” report. This is then followed by the US (5.80% yield), Italy and Portugal (both 5.50% yield). Between 2007 and 2017, the number of internationally mobile students grew by 64% to over 5 million, according to the United Nations Educational, Scientific and Cultural Organisation, with the US, UK and Australia hosting the largest number of them. Savills said that Australia benefited from its proximity to major Asian source markets and has seen international student enrolment into higher education rise 41% between 2012 and 2017. Savills said this about accommodation for students. “Despite a rise in student numbers, and in turn investments, student accommodation remains largely undersupplied at the national level.” It added, Student housing provision rates, the number of beds for full time students, in major markets range from 34% in the UK to just 10% in Australia.” Article in edgeprop.my here.

I could not find that many stats about student accommodation provision rates here in Malaysia. However, I know this. Student accommodation nearby many universities continue to be one landed property to 20 or more students. Secondly, the properties nearby some good universities with large number of students continue to carry a premium because of the potential rental yield. This is despite everyone saying that the property market is slowing down which is true. It has been slowing down in terms of transactions and value since 2013. Latest article about the property market is here. Safely and surely would be two good descriptions for student accommodation, if that’s what our property investment direction is going.

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