A reader asked us why there is so much student accommodation being built in Dublin: “I’m curious as to why this is happening … suddenly there’s a load of it. Is it EU grant led?”
There certainly is a lot of student accommodation going up in the city. However, this trend does not seem to be EU-grant lead. It seems to be profit-led.
Owners of purpose-built student accommodation generally charge higher rents for smaller spaces than do regular residential landlords.
But students – or, more likely, their parents – are willing to fork out for it. There’s a perception it is safer, and of better quality.
It allows students to avoid the “bear pit that is the Dublin rental market”, says Lorcan Sirr, lecturer in housing at Dublin Institute of Technology.
“It is not cheap to live in bespoke student accommodation, but you should be able to get a nine-month lease, and you should be in fairly well-managed accommodation, that is clean and safe,” says Sirr.
Student vs Residential Construction
There are 4,269 student bed-spaces under construction in 26 different schemes in Dublin at the moment, according to Daniel Moody of Dublin-based Future Analytics Consulting.
As he counts it, approximately 1,360 of those will be ready for students to move in to for the academic year that starts in September 2017.
For comparison, there are 5,261 housing units under construction in Dublin – 2,429 houses and 2,832 apartments – on 144 sites, according to a spokesperson at the Department of Housing.
(The accuracy of the housing figures that the department uses has been questioned by some experts.)
This isn’t a perfect comparison, because Moody is counting beds, and the department is counting houses and apartments, which usually each have multiple beds.
But it gives you an idea of the scale of student-accommodation construction, compared to other residential construction in the city.
Why Build It?
“Profitability is (…) a key consideration that has driven the student accommodation market,” says Moody, of Future Analytics.
There is also a trend towards the developers retaining ownership and renting the accommodation out themselves, he says.
“Large investment funds, such as those directed by pension and insurance companies, have identified student accommodation as a desirable, long-term invest option given existing and continued future demand,” he says.
Jack Leahy of the Union of Students in Ireland says there is a serious shortage of purpose-built student accommodation in Dublin.
A 2015 report from the Higher Education Authority warned there was a major gap in the supply of student housing nationwide.
And demand is only expected to rise, because the number of students is predicted to increase dramatically over the next seven years, rising from about 160,000 to over 192,000 by 2024.
So Leahy is happy to see more purpose-built student accommodation being built. But he’d rather see educational institutions building it themselves.
“We are keen to see institutions being allowed to borrow to invest in their own accommodation on campus because while it is still quite difficult … it is easier to hold them to account, for the prices they charge, than private developers,” he said.
College grants don’t come close to covering rent these days, he says. As the cost of living has skyrocketed, grants have remained static, says Leahy, which severely disadvantages lower-income students from outside of the main cities.
Moody, of Future Analytics, adds that the government is aiming to attract more international students, and needs purpose-built student accommodation to do so.
Leahy says students arriving from abroad often expect housing, and “They haven’t got the capacity to house them on campus as they expect to be housed,” he says.
So the government aims to encourage the construction of more student beds. Its Rebuilding Ireland strategy commits to “develop a national policy on specific needs and mechanisms for the development of appropriate on campus and off-campus student accommodation”.
Under the strategy, developers of student housing, along with other large project developers, can apply directly to An Bord Pleanála for planning permission, which speeds up the process.
As Leahy of the Union of Students in Ireland sees it, all this will help students directly, but it will also be good for the housing situation in Dublin more broadly.
“It is generally a good thing that there will be more purpose-built student accommodation, it will take pressure off the rental market and … (hopefully) drive rental prices down,” he said
Purpose-built student accommodation can be very pricey.
See, for example, Broadstone, where the cheapest option is to share a room with someone else in a flat with six or seven other rooms.
One bed in that room costs €180 per week, so the room attracts €360 per week, and then there are five or six other rooms in the apartment too all attracting the same rent.
In other student accommodation we examined, prices per room ranged between €225 and €260 per week. Rooms are usually en suite, prices include bills, and the kitchen and living room are shared.
GSA and Hines, two of the largest providers of student accommodation in Dublin also didn’t respond to queries about their pricing.
The rents that can be charged are a matter for the Higher Education Authority, and aren’t restrained by the rent cap, says John Whelan, a spokesperson for the Department of Housing.
In addition to serving international students, the government is keen to encourage the construction of student housing to try and free up space in the over-crowded private rental sector, says Sirr, the housing lecturer.
“There are about 8,000 students in the private-rented sector and they are hoping to transfer them all into student housing,” says Sirr.
But realistically most students won’t live in student accommodation throughout their time in college he says, due to price and the fact that they are living in an institution.
Still, building of student housing is a good thing in terms of the housing crisis says Sirr.
“Anything that takes people out of the private-rented sector and puts them into purpose-built accommodation, should free up some badly needed private-rented accommodation,” he says.