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If Normal People’s Connell got his place in Trinity now, he’d be paying €287 a week

Jennifer O’Connell: Investors are salivating over student beds like they’re the new bitcoin

It was Benjamin Disraeli who said universities should be places of “light, liberty and learning”. He did not add that they also offer some of the best risk-adjusted returns in the real estate sector.

Finding somewhere to live when you went to third level used to mean opting for one of a range of functional, affordable, albeit dreary, choices. There were bedsits, digs, hostels, on-campus accommodation, studios, flats and, from the 1990s onwards, the occasional new shoebox apartment.

In Sally Rooney’s Normal People, set in 2011, Connell spent his student years in a flat off Brunswick Street, sharing a box room with his friend Niall. It was damp and cramped, but he could afford it thanks to a part-time job in a restaurant. If Connell got his place in Trinity now, he’d be looking at €287 a week for a gold en-suite studio in a purpose-built student accommodation block in the same part of town. He’d probably have stayed home in Sligo.

The student accommodation squeeze is a perennial crisis – if you’re a student. If you’re an investor, it’s boomtime. Across Europe, there are an estimated seven students competing for every available bed, and business has never been better.


In Dublin, where 61 per cent of student accommodation is in private ownership, three companies – Yugo, aparto and Fresh Student Living – dominate. Yugo has 3,050 beds across nine residences, accounting for 16 per cent of private student beds in Dublin. Here, three student accommodation buildings in Dublin and Galway changed hands for a total of €305 million over the past year, including a single deal worth €145 million on three student residences (known in investor speak as PBSAs, or purpose-built student accommodation, and regarded by the 2017 National Student Accommodation Strategy as the main solution to the student housing crisis).

Alan Artus, the chief executive of one player in the market, Generation Partners, said the student PBSA market in Ireland was “very attractive” because it “continues to be characterised by a significant supply shortage”. Student accommodation is “a strong asset class” enthuses Savills, while Knight Frank suggests “outperformance is likely”. Yay for those significant supply shortages.

There’s something nauseating about investors salivating over student beds like they’re the new bitcoin.

Students who don’t live near a third-level institution and can’t afford to pay the prices these places charge – and who don’t feel the need for their student experience to feature a private gym, cinema and conference room – are faced with a grim range of choices. They can commute long distances, as 17 per cent of students now do. They can look for digs or move in with a family member, if they’re lucky. Or they can take their chances in the scrum for on-campus accommodation, or the Hunger Games that is the private rented sector. Or they can emigrate to a place where accommodation targeted at students is priced with students in mind. Or, I suppose, they can just not go on to higher education.

This isn’t an exclusively Irish phenomenon. Students across Europe are facing an accommodation crisis – and the PBSA sector is thriving. “PBSA posted a record year, with €11.6 billion deployed across the EMEA region,” says JLL, a real estate services company.

The other problem with relying on the private sector to meet your student accommodation needs is that it can’t actually be relied upon. Its (entirely legitimate) goal is to make money, and any limit on that is a deterrent. “Landlords will need to pay attention to how much they can raise rents before they become unaffordable for students,” cautions Savills. In Dublin, several sites with planning permission for student accommodation are applying for permission to switch to residential.

Just like the wider rental crisis, the student accommodation squeeze is fuelled by a range of factors: landlords leaving the market, construction inflation, skills shortage, population growth. Student numbers have increased by 25 per cent in a decade.

But the real issue is ideological. Providing students with somewhere to live shouldn’t be looked on primarily as a money-making racket for international investors. The 39 per cent of student housing beds in Dublin not operated by the private sector belong to universities and institutions, but even there, prices are high, competition is fierce and supply is uncertain. Recently, 1,200 beds destined for UCD campus accommodation were mothballed due to rising construction costs. DCU previously put on hold plans for 1,240 beds, but is going ahead with 405.

There are no quick answers. The Government’s Housing for All plan will make it more straightforward to get planning for PBSAs of 200 bedspaces or more, which sounds like better news for investors than it is for students. The Government wants more people to rent rooms out to students and earn up €14,000 tax free – but again, this is good for homeowners, and less so for the students paying €14,000 a year for someone’s spare room. Students can avail of the rent tax credit of €500 a year – in practice, less than two weeks in one of those purpose-built blocks.

Registration fees of €3,000 should be abolished, income thresholds for grant applicants who have to live away from home should be raised and grants extended. And higher education institutions need to focus on providing affordable student accommodation.

If so much of Ireland’s future prosperity depends on our much-vaunted well-educated workforce, it’s time we stopped allowing the rich to get richer off the back of student misery. As one desperate parent wrote to The Irish Times this week, her son has a place in University of Limerick but “nowhere to live. There is no accommodation available. Not a house, not an apartment, not a couch to surf on. Nothing.” His best option, she concluded, may be a caravan.