Temporary Living: a trend on the rise
DWH AG, am Nov 29, 2018, 2:52:18 PM
A new type of living is changing the city. More and more people are literally living out of their suitcases instead of setting up permanent apartments. Furnished micro-apartments are rented for limited periods of time and then vacated. What used to be just for students is now gaining appeal with many demographics. Some providers have already specialized in this market segment and offer all-inclusive packages. They all have one thing in common: flexibility and service at the forefront.
From “student dorm” to micro-apartment
When thinking about student residences, most people have memories of tiny, messy rooms, parties at any time of day or night, and practically no peace and quiet for studying. A common kitchen in a questionable hygienic state completes the picture. For many adults, the student residence was the first independent accommodation outside the family home - and an experience with both positive and negative aspects.
However, this classic picture doesn’t quite hit the mark anymore. This is due to an increasing number of residences in university cities such as Berlin offer a range of services in addition to state-of-the-art furnishings. A friendly concierge greets students at the reception and asks about their day. Housekeeping and laundry services ensure cleanliness and comfort. Even social activities such as cooking courses and day trips are organized for the residents. Naturally, a room in such a comfortable boarding house costs a little more than one in a common dormitory.
Still, the demand is rising. A current analysis by the real estate service provider Savill shows that over the course of the last six years, the number of student apartments in Germany has tripled. This trend can also be seen in investments. In 2017, a total of 990 million Euros was invested in this growing market segment. There is, however, a much broader force at play. Living has changed generally, and all-inclusive real estate is now looking more attractive, even to non-students.
Moving in with just a suitcase
A new lifestyle has developed in the last few years, inspired by the affordable range of apartments for students: temporary living. It is also appealing to young professionals. Apartments are hard to find in large cities like Berlin. Prices have been soaring for years, above all, in the desirable inner-city areas. For this reason, more and more tenants are prepared to sacrifice on space for a certain amount of time. The market has responded with special offers. Residential complexes for young professionals are usually separated from buildings that mostly accomodate students. But they work in similar ways.
Micro-apartments are anywhere between 18 and 45 square meters in size. They pack in rooms, a shower and a kitchen, are fully furnished and have all the basics on hand. That’s why a temporary lifestyle in a small apartment is attractive for many tenants. Instead of hiring a moving van, you just need a suitcase to move in and out. Apart from your personal belongings, everything else you need is waiting for you - from towels and linen to cooking utensils.
In common areas, you can get to know people with common interests. Providers are even offering internal apps, with which residents can keep in contact with neighbors and organize daily life. There is a real person to contact for help with questions and issues. Billing is extremely simple, because all ancillary costs are included in a flat rate: electricity, heating, TV and internet all-in-one.
Temporary Living: a market showing promise
Our entire society is changing at breakneck speed. People prefer flexible and mobile lifestyles today. The work market is shifting. Fixed-term and freelance working conditions are becoming more significant. Young professionals are expected to be very flexible - even about where they live. They move to a location temporarily to work on a particular project, for example, or to gain experience as an expat. It’s a manageable amount of time to avoid a cumbersome relocation process.
Temporary living is proving to be the sub-market with the most growth on the property market at present. Only a part of this market is occupied by students. The number of small apartments will continue to rise, as will the significance of this for investors. Units are frequently sold individually as condominiums. This offers a good ROI, even with just a small invested amount. However, there are also forms of investment that offer even more flexibility, such as property funds. As the demand for rented apartments in the big cities continues to rise, these new concepts will most likely have an even stronger effect in the future.