Slumlord Millionaire – The Truth About Student Housing in Australia

This time of year is hectic! For students, the massive ‘assignment crush’ is hitting like a tsunami and tutors are frantically trying to mark assignments on time while stemming the flow of emails. Young professionals are finding out the dark side of EOFY and all of us are getting colder, especially those experiencing their first Aussie winter, slowly freezing, unprepared for an actual cold snap.

But spare a thought for those who haven’t started their postgrad journey yet. While these next few months are a time of nervous yet excited anticipation, it’s also a time of angst and uncertainty. As the butterflies settle and the congratulations from friends and family trickle away, an uncomfortable thought might be forming …. ‘where the f#@k am I going to live?’

Most students are prepared to start studying when they get to their university. they have their laptops, readings, books. All they need to dive right in. Except for one major element. Housing.

Every year it’s the same. Students think that two weeks is enough time to get a reasonable place to live and then they end up having to fork out way too much money because they can’t find something by the time uni starts. Or, more often, they settler for sub par accomodation. In the wake of the ABC ‘cash cows‘ investigation, LDS wants to provide new students our take on what student housing really looks like in Australia. A nightmare.

This was what happened to PJ. She arrived in Melbourne from India a fortnight before classes started and four-person share house for $160 per week (pw). While reasonably close to uni, the house is run down, with no cooling or heating. All the bedrooms have 2-3 single beds in them, and everyone shares one bathroom. PJ doesn’t get to choose who she rooms with or who shares the house with her. Recently, a housemate who was constantly intoxicated assaulted another housemate. He was asked to leave but not before the landlord shifted him next door into his other property where he could still access PJs house.

When asked why she rented the room in the first place she said, “they [real estate agents] need to see previous rental history, and we [international students] don’t have that”.

So why didn’t she move out? She told us that “we aren’t earning, and we are just covering food and rent, how are we supposed to save thousands of dollars to get a rental bond?”.

In Melbourne and Sydney, peak house prices have made the rental market tough for anyone, but students are the hardest hit. PJ is yet another student being exploited by both Australian and international landlords who cram as many students as possible into a house. Desperate for a roof over their heads, the new arrivals take what they can get and put up with the harsh and expensive conditions. Not every private landlord or sharehouse, student housing company is like this. But there is an increasing number of opportunistic properties owners looking to cash in on the mass migration of international students to Australian Universities.

These so-called ‘slumlords’ own million dollar properties set to be demolished and redeveloped, but will use to house students until the cost of upkeep is too high. Others own multimillion-dollar property portfolios, which can be as little as 2 apartments in the inner city. They then shove as many people as possible in there to maximise their profits. For example, in PJs house, the expected rent is approximately $160 pw. It’s a four-bedroom house which should have no more than five people in it to remain safe. So the rent would be $800. But the landlords are using it as a rooming house, and as there is only one bathroom, the house can now legally house ten people. The maximum amount the landlord receives now is $1600 pw — a 65% profit margin after costs of upkeep and utilities.

We met PJ’s landlord who unabashedly tells LDS he has several houses all over Melbourne just like this one and that he looks after is students. What we saw though was misery and delusion like he thinks he’s doing the students a favour.

Australian media are highlighting the problem

Students living in squalor

The reality is that incoming students are quite naive thinking that it will be easy to secure housing once they get here. They end up in these types of scenarios and don’t understand it’s not ok. Sally, a member of a Melbourne Universities teaching staff, is concerned as these opportunistic companies and private landlords are looking to make money of arguably quite poor students and to their detriment. “It makes me mad. The poor things don’t say anything because they don’t know it’s illegal. I’ve had them come in [to class] sick and feverish because their houses have no heating and it’s 2 degrees at night.”

Sally’s primary concern is overcrowding. Cleanliness was also mentioned, with so many students in these houses, the kitchens and bathrooms are hard to keep clean. There is so much wear and tear that dirt and crud accumulates that can’t be shifted. Properties are old and damp, and carpets are frayed and crusty with years of caked-on dirt. The big concern is seasonal mould growth, known to cause severe respiratory illness and be aggravating to those with asthma, running their immune systems down throughout their tenancy. We asked Sally if she had seen some of these houses “Oh yeah, last week I saw one where they can’t use the kitchen because it’s so dirty, you know, broken titles with mould, not the sort of thing you can wipe up”. Sally made a disgusted facial expression when telling this story, “some students say they don’t cook for fear of getting ill, or there are too many people, they don’t get the chance to cook food as the kitchens never free”.

Dangerous black mould

“It makes me mad. The poor things don’t say anything because they don’t know it’s illegal. I’ve had them come in sick and feverish because their houses have no heating and it’s 2 degrees at night.”

– Sally, University employee

Overcrowding fears

Overcrowding, where more than the legal or recommended number of people are in a dwelling, is becoming worse for students. Some states have laws against overcrowding, but others don’t, which makes it hard to deter landlords from doing it. The main problem is that landlords are not registering dwellings as rooming or boarding houses which must abide by maximum occupancy standards. For example, the general rules of occupancy in these dwellings are that a bedroom must be more than 7.5m2 for one person. If two people are sharing, the room must be 12m2 or bigger, and for every additional person, 4m2 must be added. A recent study of the Sydney rental market by VincentCare Victoria found that more than a quarter of people were living in overcrowded dwellings. Inner suburbs, like those around universities, were the worst, with 40% or places being classed as overcrowded.

Overcrowding, a larger number of people are in a dwelling than recommended for health and safety reasons, is becoming worse for students. Some states have laws against overcrowding, but others don’t, which makes it hard to deter landlords from doing it. Even worse, states like Victoria make it ok to board four people or more in a room and don’t specify minimum space per occupancy.

To be safe, the standards of occupancy in these dwellings are that a bedroom must be more than 7.5m squared for one person. If two people are sharing, the room must be 12m squared or bigger, and for every additional person, 4m squared must be added. A recent study of the Sydney rental market by VincentCare Victoria found that more than a quarter of people were living in overcrowded dwellings. Inner suburbs, like those around universities, were the worst, with 40% or places being classed as overcrowded.

The other issue is that rogue landlords are not registering dwellings as rooming or boarding houses. These rouge operators may ask for cash rather than providing secure BPay or depositing accounts.

This double bed bedroom is 8 square meters

Many students say they don’t mind as long as the place is close to uni and is cheap, but there are hidden dangers too putting up with dodgy rentals that students don’t think about, fire safety is the most dangerous aspect for example. In 2014 the Lacrosse high rise in Docklands, an inner-city Melbourne apartment block popular with Chinese internationals, narrowly avoided going up in flames as dozens of international students were crammed into two-bedroom apartments. Authorities say it’s just a matter of time before we something as horrific as the 2017 Grenfell Tower fire in London which killed 58 people.

The 2014 Lacrosse high rise fire caused by overcrowding

For students, having their bonds’ stolen’ is the biggest fear. Students hand over security deposits to a landlord but are given a poor excuse as to why it is not returned when they leave. This fear traps students. Noise is also an issue. Studying can be almost impossible, and grades are compromised. Living situations are a common reason why students are struggling to pass classes. As with PJs story, students can’t always feel safe in their own home, and this causes stress for students, particularly young women.

This broom closet sized single bed bedroom is 7 square meters

Not just internationals

The issue isn’t only affecting international students, though they seem to be the hardest hit by the housing crisis. Australian students are also struggling, with many of them couch surfing, squatting or ‘sleeping rough’. Raj, a master of data science graduate applied for 70 rental properties before getting a lease, even though he had landed a well-paying role with a large tech company and had a solid rental history.

And while Australian students are generally sympathetic to internationals, they don’t have to deal with the same issues. By the time they are at postgraduate level, they have gotten wise to the illegitimate landlords or have built up income and rental history to get leases with friends. They also are less like to be preyed upon as international slum lords see Aussies as a liability, they know the legalities and are likely to report. But for most Aussies, the problem is hidden and they don’t see any problems.

Ben, a Masters of Communications student at an Inner-city Melbourne University was asked if he thinks international students are preyed upon. He says that “the ones that I see are actually living in secure apartments with one or two other people. Better than where I live now, right in the CBD with other students near the university. They all stay around that one area and it’s close to everything. Mostly Chinese, they can afford it”. This is a common attitude from domestic students, because that’s whats portrayed in the media and that’s what they see of their class mates. Ben said he doesn’t see an issue but knows that’s because the students at his university have the money to pay for housing, but he knows not all students are as affluent as the ones in his course, he just doesn’t see this side.

He’s not wrong. For the privileged few, university accomodation is comfortable and secure. But it is expensive, costing upwards of $33,000 pa including meals and utilities. That’s $635 pw! More than most families spend on rent.

The beautiful rooms at an exclusive Melbourne Uni college

Raj, on the other hand, as an Indian-Australian who has studied in Canada and Australia, thinks that international students need to take responsibility. He says that some students are compromising on the wrong aspects of their budget, and has some advice for incoming students. His tough love attitude is that they need to be less lazy and deal with more travel time because they can’t afford not too.

“You can’t be close to the uni, you will be priced out of the market. You can’t just take a run down place with people you don’t know. You will be stuck. That’s you for the next while, nowhere comfortable to sleep or study. No privacy. You have to compromise. You have to look further out from the uni and take public transport. You will fail your units otherwise.”

Raj, Data science graduate

The reality of the Australian housing market for students isn’t what they are sold by the glossy photos in Uni course guides, because it isn’t the responsibility of the unis. Raj has a point. While rouge operators are predatory and dangerous, students need to understand that planning and research is key to succeeding in their studies, and a reasonable living situation is part of this. Sally says “reach out, we want to help you. Talk to your tutors, lecturers, advisors. Keep talking, scream out if you have to. Some one will hear you”.

Finding a place to live before starting your degree is daunting, but necessary. Start early to make sure you aren’t left out in the cold. Get to Australia as early as you can to beat the rush.

This post is not affiliated with any Australian University or governing body. It is the opinion of the LDS writing team and cannot be considered legally binding advice regarding your living situation. For more information, please visit your state consumer affairs or tenancy advocacy website.