University property sell-offs heighten ‘dire’ housing shortage as students return to Australia

<span>Photograph: Bloomberg/Getty Images</span>
Photograph: Bloomberg/Getty Images

Universities have failed incoming international students and exacerbated problems for those already struggling to find a place to live by selling off student accommodation to private providers during the Covid period, student advocates say.

About 40,000 international students are expected to rush to Australia in time for first-semester classes, after the Chinese government on Monday announced a snap ban in recognising online degrees obtained from foreign institutions. Students unable to access visas, flights or accommodation can seek an exemption from the ban but only after their degree is completed.

But once they arrive, they will face an incredibly tight housing market.

A number of providers sold property during the pandemic. Student accommodation remains some of the most highly priced accommodation in major capital cities, far exceeding median unit rents for significantly smaller offerings – and many are at capacity.

“It’s a failure on the part of universities,” the National Union of Students president, Bailey Riley, said.

Selling off property

The University of Sydney sold off more than $70m of property in 2021, including $31m of “end of life” terraces that provided some of the most affordable close-to-campus accommodation in the area.

Options are currently being explored for its International House, which has ceased operating, including converting the site into a larger accommodation facility.

In 2021, the University of Wollongong placed three of its assets on the market including Weerona College, now operating as privately owned student accommodation, and Marketview, which is operating as a hotel. Its International College was withdrawn from sale.

Related: China winds back online study ban after students left scrambling to get to Australia

A spokesperson for the University of Wollongong said the university’s 2,278 student beds were at capacity and demand for accommodation was “extremely high” – in large part due to the tight rental market.

“As we are unlikely to be able to meet the demand for on-campus accommodation, we are working with external accommodation providers to determine their availability to assist our students,” they said.

“The decision ensured the provision of university accommodation did not affect UOW’s financial sustainability, and our capacity to deliver high-quality teaching and research programs and strengthen support for students during the pandemic.”

Meanwhile the University of Technology Sydney (UTS) sold three accommodation buildings with 428-bed capacity to private provider Scape for an estimated $95m. The price of accommodation in the building increased 15-20% following the sale.

A spokesperson for UTS said it was a “difficult decision” in 2021 to sell one-third of its student beds but was necessary to “preserve staff jobs, and to avoid impacting the university’s teaching and research” over the pandemic.

Riley said member unions had been contacted by international students in “dire” situations, who were frustrated by the lack of help they received from their universities in securing accommodation, and extremely high prices providers were charging.

In Melbourne, a large studio apartment at a Scape complex on inner-city Swanston Street would set a student back $759 a week – about $300 more than many equivalent current listings on commercial real estate sites, and 57% higher than the city’s median unit rent of $482 a week. A single bed in an eight-person apartment-based Scape dorm would cost a student upwards of $477 a week.

An Iglu complex in Flagstaff Gardens offered studio apartment rooms for rent between $509 and $559, with the most expensive offering “opening windows” and a double bed as some of its most attractive features.

In Sydney, Scape’s top-end offerings include a 21 sq metre studio apartment for $749 a week. Sydney’s median unit rent in the December 2022 quarter was $616.

At the bottom end, Scape was charging $369 per person for a twin room in an apartment shared with seven other people.

At the time of writing, most of these options, even the most expensive ones, were full.

“[Private providers] typically exploit students with higher rents and ridiculous bonds which leave students with a lot of stress and worry,” Riley said.

“Universities should have the responsibility to look after students but they’re leaving it to providers.”

Guardian Australia sent specific questions to multiple student accommodation companies which did not respond directly, but provided a collective response through the Student Accommodation Council, an industry lobby group run by executives from some of the biggest entities.

The spokesperson said the prices for student accommodation often included utilities, security and access to communal areas such as study spaces, and sometimes gyms.

“Our members pride themselves on giving students safe, professionally managed, and student-led communities in which to live that offer the best experience possible,” the spokesperson said.

Student accommodation at capacity

A former University of Sydney student, who asked not to be named, lived in a single room run by the institution at a rate of $356 a week through the 2020 lockdown until 2021. The double bed was squashed into the corner of the room, kitchen and bathrooms were communal and heating and cooling was a wall heater and a fan.

“Channels for feedback were very limited … the room is quite cramped and can get stuffy on a hot day with no AC,” the student said.

“Communal kitchens and bathrooms are definitely not a setup everyone can tolerate. Cleanliness and upkeep … depended on the self-discipline of residents … and availability of maintenance and cleaning staff, which could be lacking.”

A University of Sydney spokesperson said the health and wellbeing of students was its “highest priority” and resident complaints were taken seriously.

It said the terraces sold by the university were not suitable for student accommodation without serious investment and it had instead chosen to redevelop the centre of its Darlington campus for housing.

Of about 2,400 places in dormitory accommodation offered by the university – including Sydney University Village of which the university has a minority share – all were at capacity.

“We remain committed to providing high-quality and affordable accommodation for our students and our accommodations remain some of the cheapest in the market,” they said.

‘Ripe for exploitation’

Alan Morris, an urban and housing studies scholar at UTS, said the situation for international students had “definitely worsened” since he first studied their precarious rental situation in 2019.

That research, published last year, found that among the bottom 25% of students, many were in overcrowded housing, with unclean shared spaces, mould issues, broken appliances and bathrooms in poor condition, all of which often affected their studies.

Morris said the first step was ensuring international students understood their rights as tenants – as they were often “ripe for exploitation”. The second was investment in affordable housing to avoid a “spiral of decline” leading to poorer academic standards and students simply deciding to study elsewhere.

“For a lot of international students it’s going to be an impossible situation”, he said.

Morris said accommodation costs listed by popular companies of up to $900 a week for one-bed rentals was “mind blowing” and an “absolute scandal”.

“Universities are standing with arms folded and seem to have no capacity to control these prices,” he said. “There’s no duty of care on the education sector to ensure students are housed … students in precarious situations are going to struggle and even the middle section if they don’t find employment.

“We could see a lot marginally housed and homeless.”

Related: Visa delays await Chinese students returning to Australia after sudden ban on online learning

Tenants Victoria’s director of community engagement, Farah Farouque, said the organisation remained concerned about the welfare of international students.

“In 2020, international students were among the first to feel the impacts of the pandemic. Many had gone home for the holidays and couldn’t return but their cars were parked in their rented home, their personal effects remained in bedrooms and they had ongoing obligations on leases. Others, who were still living here, faced mounting unpaid bills and had no recourse to the income support available during the crisis,” Farouque said.

“International students are now returning to a very tight rental market which means a new set of pressures on this group.

“Some students have to resort to unregistered, overcrowded rooming houses for accommodation, often forced to share bedrooms with other students, which meets the definition of homelessness.”

The president of the National Tertiary Education Union, Dr Alison Barnes, said it was “absolutely crucial” for students to find appropriate and affordable accommodation.

A spokesperson for the Department of Education said education providers had “responsibilities” to international students to help their adjustment to living in Australia and support their wellbeing.

The department is working closely with the education sector and state and territory governments to help overcome the logistical challenges associated with this change,” they said.

  • This article was corrected on 7 February, 2023. An earlier version said the University of Sydney had sold its international housing block.