Finding affordable housing for university students has become more and more challenging across Europe, and the increasing demand and rising property prices are making it even more difficult. In Hungary, it was the case of Fudan University that brought to light the fact that the deepening European housing crisis is also affecting the country’s university students, as there are not enough dormitories and rent is becoming less and less affordable.The original plan was to create housing for more than 8,000 students at the Budapest Student City, which was to be built as part of the Southern City Gate (Déli Városkapu) project, but the Chinese university has made the realization of this uncertain. The Hungarian government now plans to build the campus of the Chinese Fudan University partly on the site previously intended for providing housing for Hungarian students.
The number of students in Europe has shot up
The situation in Hungary is demonstrated well by the fact that in the 2021-2022 academic year, nearly 300 thousand students were enrolled in higher education, with roughly 55 thousand dormitory beds available in total. Although improvements have been made in recent years, the Hungarian Student Council's Conference (HÖOK) says that having 130-140 percent more applicants than beds is not uncommon and the situation is unlikely to improve in the future. Things are particularly bad in Budapest, where around 10,000 extra beds would be needed. Of course, not all students want to live in a dormitory, but compared to the rental market, it is still the cheapest option.
However, the Hungarian capital isn't the only one struggling with this problem – most major European cities have seen an increase in the number of students. According to data collected by Berlin's Taggesspiegel, the number of students has grown more than that of the population in many places. Understandably, student accommodation has not kept up with this growth. At EU level, this means that between 2013 and 2020, the population of the EU grew by 1.4%, while the number of students increased by 8.8%. For example, the population of Paris grew by 3.7 percent by 2020, while 20 percent more students lived in the French capital in 2020 than in 2013. London and Amsterdam, among other cities, have seen very similar figures, but the exact opposite has occurred in Helsinki, Finland.
In recent years, Berlin and Brussels have seen a minor boom in the number of university students, with the number of students in both the German and Belgian capital growing by more than 30 percent in the 9-10 years following 2011. According to 2020-2021 figures, Berlin had 203.8 thousand university students and Brussels nearly 116 thousand.
Oslo and Zurich were not far behind, but London, Paris and Amsterdam also saw a growth of over 20 percent.
Budapest is one of the big cities where the number of students has practically stagnated.
Between 2011 and 2021, growth was only 1.6 percent, meaning that 114,000 students lived in the capital in 2021. Vienna, Lisbon and Copenhagen have also experienced stagnation, while Prague and Warsaw have seen the opposite.
The real-estate market couldn’t keep up with the growing number of students
This shows that there is a huge demand for student accommodation and dormitories almost everywhere in Europe. And while rent in EU countries rose by an average of 9.5 per cent between 2013 and 2020, the amount spent by EU countries on this type of investment varies quite a bit. The trend seems to have reversed in 2022, with €9.8 billion invested by private investors in dormitories or student accommodation up to September, which is the highest amount since 2012.
In the last five years, the UK has by far spent the most money in Europe on improving student housing. This amounts to €33.5 billion, which would be more than 13,000 billion forints at the current exchange rate. (It is worth stressing that this is not public spending, but investment from the private sector.)
According to a recent article in the Guardian, the current housing crisis in the UK is reminiscent of the 1970s, when many students were forced to sleep in their cars or in sports halls due to the lack of dormitory accommodation and affordable rentals. The situation is not good now either, mainly because of the huge demand in the rental market, the continued expansion of universities and the return of foreign students after the pandemic subsided.
A summary by the Financial Times shows that since 2000, the number of students enrolled in universities has risen by 65% to 562,000, but the supply on the real estate market has failed to keep pace with this growth. Even though there are now 700,000 beds in student accommodation in the UK, this is not enough, as on average there are 2.4 students per room.
It is thus no coincidence that London plans to add a further 20 thousand dormitory spaces to the 96 thousand already in place. Of the European cities surveyed, London has the most student housing available, followed by Paris with 75 thousand beds and Amsterdam with 29,500. A further 15 thousand are planned in the French capital and 5,200 in the Dutch capital. (There is no available data for Budapest).
However, the examples of Seville and Valencia show that investing in student housing is well worth it. In the two Spanish cities, investors could count on an average return of 6-5.5 percent in Q3 of 2022, which exceeded the returns expected on other residential property. The same was true for Warsaw and Prague, to name two non-Western cities as well.
Hungarian students stay at home or rent with others
Of all the European countries compared, Sweden has the highest proportion of students living in dormitories or residence halls. This is just over 30%, slightly behind the Netherlands and Slovakia. In Hungary, 23.2 percent of students lived in a hall of residence or a dormitory, which is the second highest rate in the region behind Slovakia. This also indicates the need for affordable housing.
Concerning the percentage of students living at home with their parents, Italy leads the list. More than two-thirds of Italian students did so in 2019-2020, according to statistics. The only other European country to have such a high proportion living at home during their studies was Georgia.
In Hungary, only 30% of the students continued living at home while getting their university education.
In most of Hungary's neighboring countries, the rate was typically higher. In Romania, for example, more than half of students completed their university education while living at home, but in Serbia and Slovakia the proportion was also above 40 per cent.
This phenomenon seems to be unknown in Denmark, where statistics show that everyone spends their university years in rented accommodation or in dormitories. It's also uncommon for young people to live at home during university in the Nordic countries. The norm is to rent a flat with other students, for example – two thirds of students in Norway do so. In Hungary, this figure was 38.8%, which is high compared to neighbouring countries (except Austria) and even to Italy and France.
It is telling, however, that only 8 percent of Hungarian students could afford to rent on their own, which is not surprising given today's property prices in the country.
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This article was written as part of the European Cities Investigative Journalism Accelerator project in collaboration with the Berlin-based Tagesspiegel. It is a series of media reports on the challenges facing European countries and cities. The project is funded by the Stars4Media programme.