Budget 2026 insights: the crucial crossroads facing South Africa's student accommodation sector

As Finance Minister Enoch Godongwana prepares to table the 2026 National Budget, the student accommodation sector stands at a crossroads. 

Godongwana will deliver the 2026 Budget on Wednesday, February 25. 

For years, providers have bridged the gap between the state’s educational promises and the physical reality of a student's need for a safe place to sleep, says Inga Ncomanzi, the CEO of the South African Student Accommodation Providers Association (SASAPA).

She says that, however, the current model is fraying. “To ensure the sustainability of this vital sector, we are looking for a budget that moves beyond mere survival toward strategic growth.” 

Earlier this month, the Portfolio Committee on Higher Education raised serious concerns about unsafe student accommodation and gender-based violence (GBV) at Eastcape Midlands TVET College following an oversight visit to its Graaff-Reinet campus.

Committee chairperson Tebogo Letsie said this situation placed students at risk and undermined their right to a safe learning environment. “Student accommodation is not just about having a roof over one’s head,” he said.

“It is about safety, dignity and creating conditions that allow students to focus on their studies. When young people are forced to live in unaccredited facilities, their well-being and academic success are compromised.”

SASAPA, the student housing sector advocacy organisation, says its expectations for this year’s budget are rooted in the operational realities of housing thousands of students under increasingly tight fiscal constraints.

The SASAPA 2026 wish list

• Inflation-linked rate adjustments: We are calling for at least a 5% escalation in NSFAS accommodation tariffs for 2026. The current annual cap of R45 000 for private self-catering is no longer tethered to reality. When you factor in the "minimum norms and standards" required by the Department of Higher Education, the actual cost of compliant, dignified housing is closer to R66 000. Without an adjustment, the quality of student life will inevitably suffer.
• Prompt payment guarantees: The legacy of delayed NSFAS payments has crippled many providers. The Minister must provide a definitive commitment that these funds will reach providers without the administrative bottlenecks that have historically plagued the system.
• Incentives for new developments: We need tax breaks and capital grants to offset rising construction costs. Crucially, these incentives must not be the exclusive preserve of "Big Property." SASAPA insists that these grants be accessible to small accommodation providers and SMEs. A diverse market, where small-scale landlords can compete and thrive, is the only way to solve the national bed shortage.
• Utility relief: Rising municipal rates, water, and electricity costs are the silent killers of affordability. We are looking for specific subsidies or capped utility rates for accredited student housing to ensure we aren’t forced to choose between keeping the lights on and keeping beds affordable. 

The message the Minister must deliver

To put stakeholders in greater stead, SASAPA says the Minister’s speech needs to signal a fundamental shift in how the state views the student accommodation sector:

• Clear multi-year funding frameworks: The era of last-minute, informal rate announcements must end. We need a predictable, multi-year funding model that allows providers to secure financing and plan for long-term maintenance and expansion.
• Recognition of housing as core infrastructure: Student housing is not an "auxiliary service"; it is core educational infrastructure. We hope to see the Minister transition this narrative, potentially unlocking more significant Treasury allocations via the Budget Facility for Infrastructure (BFI).
• Finalising 2026 rates: The industry is currently in a state of "wait and see." We expect the Minister to pave the way for the formal publication of adjusted tariffs immediately following the budget process, as previously stated by NSFAS.

Looking ahead

The 2026 Budget is more than just a balance sheet; it is a signal of intent, Ncomanzi says.

“If the Minister addresses these points, he will not only stabilise a volatile sector but also ensure that the next generation of South African professionals has the stable foundation they need to succeed.

"SASAPA remains ready to partner with the government, provided the fiscal environment recognises the true cost of dignity in student housing.” 

Speaking for the wider real estate sector, our primary wish from the government is a decisive improvement in the service delivery of the Property Practitioners Regulatory Authority(PPRA), says Century 21. 

The multinational real estate organisation says gaps in governance and inadequate systems have delayed thousands of property transactions that should be contributing to economic growth, banking activity, and industry livelihoods.

“The student accommodation market is only one area where this lost potential is evident.” 

Century 21 says the PPRA’s care and investment should be firmly directed towards strengthening the property sector and its stakeholders. “A focused approach will unlock greater investment in businesses and drive development across the industry.” 

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