Rents taking nose dive during Covid-19
COVID-19 has taken a toll on the economy and students returned back to their homes in the initial lockdowns. But with the announcement of the Unlock 2.0, we see some hope and confidence being restored among the general public. Moreover, the announcement by the HRD Ministry to conduct the University exams for final year students in the UG and PG courses has brought the education sector into motion from a long-held standstill.
Though the student housing sector has been hit hard, it was one of the most lucrative investment destinations for investors before the pandemic. While it used to be only a dream to tap the potential that the huge market of approximately 40 million students by these investors, the revenue came down to almost zero in the first quarter. On the other side, there are many students who decided to stay back during this period.
The students remaining behind have concurred staying in single hostel rooms to adhere to the social distancing norms. With this decreased demand, the rates of the hostel rooms have gone down significantly for the students that have stayed back, with almost no compromise in the student housing facilities that were promised. These facilities have proved to be saviours in these times when they themselves were on the verge of facing immeasurable losses.
The initial two months in most of these facilities were compensated by security money deposits and has been regarded as a safe option unless the returned students begin to seek a refund of the same. Amidst all these uncertainties, most rental housing services have decided to stick to the old contracts with the students and not terminate them, even though the rates of the new operator will be less. It should also be noted that the new sessions are around the corner and no one wants to miss that either.
So, an appropriate conclusion would be that with the news of the COVID-19 vaccine trials in the last phase, there is hope and optimism for both the student housing services as well as the students. With the beginning of the new sessions, students may return to their universities, at least in small numbers. Rental rates, despite world-class facilities, will be within reasonable limits. Thus, a new beginning and a fresh restart might be a win-win situation for both students as well as student housing facility owners in India.