KAGISHO MAMABOLO: Student housing needs a 2026 price signal — and it needs it on time

Every year the National Student Financial Aid Scheme (NSFAS), with the department of higher education & training, announces the student accommodation rental rate in February or March. This timetable may suit administrative cycles but it does not suit the realities of delivering student housing.

For accommodation providers the effective planning window is November of the preceding year. By that point students have begun applying for accommodation for the next academic year, indicating whether they will return to the same room or reserve a new one. Landlords must allocate rooms, contract security and cleaning services, confirm utilities, finalise maintenance budgets, secure financing and plan staffing levels.

All decisions depend on a clear, published rental rate that accounts for year-on-year escalation. When the price signal arrives months late, planning becomes guesswork. This timing mismatch is no longer an oversight; it has become systemic. More troubling is the apparent acceptance of this behaviour within government, as though delayed announcements carry no consequences for supply, investment or student outcomes.

The events regarding the 2025 accommodation rate starkly illustrate this failure. Then minister Nobuhle Nkabane did not issue a formal, written statement announcing the 2025 rate increase. There was no policy circular, no official communiqué and no document investors, universities and accommodation providers could reference.

Instead, announcements were made informally through media engagements, often delivered from one studio to another, accompanied by the then NSFAS administrator, Freeman Nomvalo. The appearances conveyed the impression the process was normal and acceptable, when it actually reflected an  avoidance of formal accountability.

Major policy decisions that affect billions of rands in private investment cannot be communicated through off-the-cuff media commentary. Best practice, in government and capital markets, requires stakeholder consultation followed by a clear, written announcements that can be scrutinised, referenced and relied on.

Developers and institutional investors require clarity on three fundamentals: the cost of compliance, the price of delivery and predictable escalation. Late, informal and undocumented announcements undermine all three.

Shorthand talking points in broadcast interviews do not constitute policy communication. They cannot be cited in contracts, financing agreements or board decisions. For a sector that depends on long-term certainty, this approach was deeply disappointing. From a business and investment perspective, the consequences are predictable.

Student accommodation is capital-intensive, long-dated and highly sensitive to regulatory signals. Developers and institutional investors require clarity on three fundamentals: the cost of compliance, the price of delivery and predictable escalation. Late, informal and undocumented announcements undermine all three.

Data from the Private Student Housing Association (PSHA), presented at the 2025 Reside Conference, shows the true cost of delivering a minimum norms and standards–compliant student bed materially exceeds the current allowance

When development costs, operating expenses over a full 12-month cycle, financing costs, VAT and platform deductions are properly accounted for, the required rental for a viable, compliant bed is about R66,000 per student per annum.

Against this reality, a 4% adjustment, announced late and without formal documentation, does not preserve value; it erodes it. The absence of a published 2026 rental rate  compounds this uncertainty. Landlords cannot responsibly allocate services or confirm pricing to students.

Banks and investors cannot approve budgets on retrospective signals. Capital, rationally, moves elsewhere. This uncertainty is most damaging in rural and peri-urban areas, where development costs are higher and risk margins thinner, precisely where the state seeks to expand access.

The sector does not seek confrontation. It seeks discipline, transparency, and accountability.

At a minimum, this requires:

• The early release of the student accommodation rental rate by November of the preceding year.
• A written, referenceable policy announcement, after consultation with affected stakeholders.
• Alignment of the rate with the true cost of delivery under the revised norms and standards.
• A predictable year-on-year escalation mechanism, indexed to construction cost inflation and operational CPI.

Late and informal announcements are not neutral administrative choices. They are implicit policy decisions that shift risk from the state to providers, and ultimately to students. In housing markets, uncertainty is the enemy of supply. In student housing, it is the enemy of access.

• Mamabolo is PSHA CEO.