Shortfall of Irish Student Accommodation Attracting Investors

The latest Development Land Market Review by property advisor, Savills Ireland, highlights shifts in development distribution and identifies student accommodation as a sector presenting potentially lucrative opportunities for investors.

According to Savills, Brexit has boosted Ireland’s appeal to international students, raising demand for purpose-built student accommodation (PBSA). Combined with growing numbers of domestic students entering third-level education, Ireland is experiencing an acute shortfall in student housing, making this sector increasingly attractive for investors.

Recent research from Savills and The Class Foundation found that investors plan to expand their European PBSA portfolios by up to 70% over the next two to five years, with nearly a third already investing in Ireland and the UK.

The demand for student accommodation in Dublin far exceeds the current supply. According to the Higher Education Authority (HEA), there are approximately 89,600 full-time students in Dublin, with 69,200 or 77 per cent being domestic students.

Dublin has close to 21,700 beds available, encompassing both privately owned schemes and on-campus housing. This results in a shortfall of approximately 68,000 bed spaces, or a 4.1x student-to-bed (STB) ratio. However, considering some students live at home, the true shortfall may be closer to 25,000 to 30,000 beds.

Nationwide, the student population has increased significantly. There are almost 207,000 full-time students across Ireland, reflecting a 22 per cent increase over the last decade. International student enrolments have also surged to more than 35,000, constituting 17 per cent of total students. This is a notable rise from 2007, when there were just over 13,000 international students (9 per cent of total students). The most common countries of origin for these students are India (17.5 per cent), the United States (14.0 per cent) and China (10.9 per cent).

“The ongoing shift in student demographics, coupled with stable rental yields and high occupancy rates, has made purpose-built student accommodation a highly attractive investment,” said Ebba Mowat, Director of Development Agency & Consultancy at Savills.

“Unlike other sectors facing greater economic uncertainty, lenders remain confident in funding student housing developments, with loan-to-cost ratios commonly reaching 65% from traditional banks and over 70% from alternative lenders.”

Residential Planning

The report also identifies a significant geographical redistribution in residential planning permissions. Dublin’s share of newly planned residential units has decreased dramatically from 49% in 2020 to just 28% in 2024, driven by restrictive rental controls and regulations limiting bulk residential purchases in the capital.

Conversely, regions such as the midlands and mid-west have seen their shares triple – albeit from a low-base, and the west has doubled its planned development share. This redistribution aligns with the objectives of the National Planning Framework, aiming for a balanced 50:50 split in growth between Ireland’s major cities and other regions.

However, Savills cautions that actual construction activity outside Dublin remains limited, and substantial improvements in infrastructure and local authority capabilities are essential to ensure planned developments progress from permissions to completed units.

“The shift towards more balanced regional development presents both opportunities and challenges,” Mowat added. “For this redistribution to materialise effectively, significant investment in infrastructure and local planning capacity is crucial. Otherwise, these developments risk prolonged delays, perpetuating Ireland’s overall housing supply challenges.”