A quiet but far-reaching shift in South Africa’s higher education landscape is opening up significant new opportunities for property owners and investors, particularly those positioned near current and future tertiary education hubs.
Following the recent gazetting of the Policy for the Recognition of South African Higher Education Institutional Types by the Department of Higher Education and Training (DHET), qualifying private institutions can now officially be recognised as universities. This reform brings South Africa in line with international norms, where academic quality, governance and research output, rather than ownership, define university status.
The country currently has 26 public universities, with two more government institutions in development. In addition, at least three major private education groups are committing billions of Rand to the development of new campuses which will be able, for the first time, to operate under the title of “university” if they meet the required criteria.
These include the Akademia campus near Boschkop in Tshwane, the new Stadio campus in Durbanville near Cape Town and the new or expanded AdvTech campuses in Pretoria, Cape Town and Johannesburg. These facilities will accommodate thousands of students but, as is almost always the case, on-campus accommodation in official university residences will fall short of total demand.
The establishment of any new school or tertiary institution typically acts as a catalyst for growth and development in the surrounding property market. Retail, food, entertainment and service businesses tend to follow student populations, stimulating local economies and increasing demand for conveniently located premises.
More importantly for homeowners and investors, residential demand in nearby suburbs almost always rises. Families relocate to be closer to campuses, staff seek nearby housing, and students require off-campus accommodation, often at scale. This combination can drive both rental growth and capital appreciation, while also encouraging new residential development where planning frameworks allow.
One of the most immediate opportunities lies in the provision of off-campus student accommodation. However, this is not an area for shortcuts. Investors who want to benefit sustainably from this trend must operate within the legal and regulatory framework - and with consideration for existing communities.
In most municipalities, standard suburban homes are zoned for single-family use, and operating student accommodation typically requires rezoning or consent use approval supported by proper building plans, parking provision and, in many cases, consultation with neighbours.
Failure to follow these processes can result in fines, closure or forced reversals, as well as disputes with other property owners, all of which represent significant risk that most long-term investors would obviously prefer to avoid.
In addition, accommodation intended for students funded by the National Student Financial Aid Schene (NSFAS) or public institutions must meet DHET and NSFAS accreditation standards. These cover minimum room sizes, bathroom ratios, safety and fire compliance, security measures, study space and lease management. Accreditation is usually reviewed annually and inspections are routine.
Just as important is being a good neighbour to other property owners in the area. Noise, overcrowding, traffic congestion and poor property management can quickly create community resistance and damage the long-term viability of an investment. Well-run, purpose-designed or properly converted accommodation is far more likely to retain municipal and community support.
It is important to note that the legislative change regarding the accreditation of private universities is not a short-term policy adjustment. It represents a structural expansion of South Africa’s higher education system, with private universities expected to play an increasingly important role in absorbing demand that public institutions cannot meet and supporting skills development, innovation and economic growth.
For property investors, this translates into enduring demand nodes around campuses, provided that investments are well located, correctly zoned and professionally managed.
Opportunities like these reward informed decision-making, and property owners and investors who would like to explore opportunities linked to new or expanding universities are encouraged to contact their nearest Chas Everitt office. With on-the-ground market knowledge and access to professional networks, our agents can help to assess potential, navigate regulations and identify properties best positioned to benefit from this important national trend.
