Choosing the Best Student Accommodation Abroad: PBSA vs. HMO Explained
TL;DR
This comprehensive blog post is an essential read for international students, visa agencies, and study abroad agents looking to navigate the complex world of student housing. It delves into the challenges students face when securing affordable student accommodation abroad, highlighting the impact of housing insecurity on academic performance and well-being. By comparing global housing costs and exploring the benefits of Purpose-Built Student Accommodation (PBSA) versus Houses in Multiple Occupation (HMO), this article provides valuable insights to help students make informed decisions based on their financial situation and lifestyle preferences. This post is extensively helpful for Visa agencies and study abroad agents to guide students towards housing options that best suit their needs, ensuring a smoother transition and a more successful study experience abroad.
Introduction:The Challenge of Finding Affordable Student Housing
Imagine you are a student—a bright, hard-working, high-achieving, ambitious student. The kind of student every university wants and every family pins its hopes on. You’ve been accepted into a college or university abroad and have secured the precious student visa. Everything should be perfect, right? Not quite. You still need a roof over your head while you study. And while you might be rich in ambition and intellect, your financial resources might be limited. Your family may have made significant sacrifices to afford the tuition and travel costs. The most economical housing option might be a room in a university dorm, but even that can be costly, and availability is limited.
The Reality of Housing Insecurity
High Costs and Limited Availability
When you tally the annual cost of dormitory room and board and what you would shell out for local market rent and food, the difference runs into thousands of dollars. But dorm accommodation is in short supply. Out of the total student population, only about 17 per cent will get dorm accommodation.
For universities that manage to meet the demand for affordable housing, there is a clear pay-off: increasing on- or near-campus student housing can be an attractive amenity and marketable edge for universities looking to maintain or increase enrollment. But, like students, universities also struggle to live within their budgets. Public funding for universities has fallen in many states over the past several decades—limiting many institutions’ ability to take on additional debt for capital improvements.
Building new dorms would require either public subsidy (in other words, money sanctioned by state legislatures) or outside equity. And through all the years when university budgets have been falling, construction costs have been rising.
Impact on Academic Performance
Housing insecurity significantly impacts academic performance. Adequate and affordable housing, food, transportation, and childcare are essential for earning a college degree. Studies show that students facing housing insecurity have lower GPAs, poorer health, and higher rates of depression and anxiety than those with stable housing. This issue disproportionately affects students with limited financial resources. Many academically successful students drop out because they can’t afford the cost of living.
The Search for Off-Campus Housing
The Compromises Students Make
If you’re unable to secure a dorm room, off-campus housing is your only option. You might find a place that’s really cheap, but the electricity, plumbing, or heating systems are in poor condition. The building might be old, poorly maintained, or located in a high-crime neighborhood. Alternatively, a better place might be available, but it could be 15 kilometers from campus and owned by a landlord who raises the rent every six months. You could share a flat with three or four other students to split the rent, but finding trustworthy roommates can be challenging, especially when you’re new to the area. Worse still, you might discover that hundreds of students are sleeping in their cars—a last resort for those who can’t find affordable housing.
Comparing Housing Costs Globally
On the website of Hot Courses Abroad we get 2024 figures comparing housing costs in the big five student destinations (USA, UK, Canada, Australia, New Zealand). They put all the costs in US dollars (July 2024 exchange rate) to make comparison easy.
Approximate weekly rent for shared off-campus accommodation | ||
Country | Rent | Comment |
Australia | USD 80-236 | Manageable costs compared to the other four study destinations. Perth and Adelaide are cheaper (around AUD 120 to AUD 200 per week compared to Sydney (up to AUD 350 per week). |
United Kingdom | USD 103-270 | Huge difference between London weekly rents (GBP 140 to GBP 210) and weekly rents elsewhere. (For example, rents in Leeds are between GBP 80 to GBP 125.) |
Canada | USD 103-235 | More affordable than London or New York. Rent varies city to city. (Montreal weekly rents are around CAD 140 to CAD 220. Vancouver and Toronto are more costly at CAD 200 to CAD 320) |
United States | USD 200-550 | Most costly. Looking at a nationwide average, weekly rent ranges between USD 200 and USD 550. City to city variation. (San Francisco rents run up to USD 550 per week; Austin rents are between USD 200 to 300.) |
New Zealand | USD 80-184 | Cheapest place to live and not much variation between cities. (Auckland rents are around NZD 200 to 300 per week; Dunedin rents are around NZD 130 to 200.) |
The Rise of Purpose-Built Student Accommodation (PBSA)
What is PBSA?
Purpose-Built Student Accommodation (PBSA) is a relatively new trend in student housing. These properties usually take one of two forms: self-contained studio or “cluster” flats with private kitchens but shared living spaces, or modern halls of residence containing ensuite bedrooms with shared kitchen, dining, and living facilities.
Global Investment in PBSA
Global enrollment in institutions of higher education is now topping 300 million worldwide by some estimates and this means that demand for student housing has been steadily rising for the past two decades (briefly interrupted by the covid years). Demand attracts private investors – led by major institutional capital.
- For instance, in May 2024, New York-based real estate giant KKR reached a $1.64 billion deal to acquire 19 student properties from Blackstone Real Estate Investment Trust.
- Similarly, Singapore-based Mapletree Investments paid $1.7 billion for 8,192 beds across 19 cities in the UK and Germany, solidifying its position as one of Europe’s largest owners of student housing.
- Other notable investments include Scape’s $658 million joint venture to add 17,200 student units in Australia and Alta Capital’s $1 billion investment in India’s student housing sector.
When the big cats put their money into student housing, it’s clear there’s substantial pay-off potential.
PBSA Features and Benefits | |
1. | Modern Design & Amenities
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2. | All-Inclusive Bills
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3. | Strategic Location PBSAs are typically located near universities or colleges, which means less time spent commuting and more time for studies and campus activities. |
4. | Enhanced Safety
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5. | Opportunities for Social Interaction For international students or those new to the city, PBSA developments offer social events and communal spaces where residents can meet people, make friends, and build a sense of community. |
PBSA vs. HMO: Which is Better?
Understanding the Differences
When it comes to off-campus housing, students often choose between PBSA and Houses in Multiple Occupation (HMO). PBSA provides the convenience of an all-inclusive package designed to meet student needs. Specific PBSA accommodations are typically described as studio apartment, ensuite apartment, non-ensuite apartment. Here’s what those descriptions mean:
| Accommodation Type | Description | Appeals To |
| Studio Apartments | Fully self-contained living space with no shared facilities. | Postgraduate students, international students, or those who prefer a quiet, solitary living environment. |
| Ensuite Apartments | Each unit includes a private bedroom and bathroom, with a shared kitchen serving as a communal space. Combines privacy with social interaction. | Students who want a balance of privacy and the opportunity for social interactions in shared areas. |
| Non-Ensuite Apartments | Provides a private bedroom with shared bathroom and kitchen facilities. Less costly than ensuite. | Students looking for a more budget-friendly option who don’t mind sharing bathroom and kitchen facilities. |
On the other hand, an HMO (House in Multiple Occupation) is a rented room in a shared house, owned and managed by a landlord.
| Feature | Description |
| Private Space | Each tenant has their own room |
| Shared Communal Areas | Tenants share areas like the kitchen and bathroom. |
| Variety | HMOs vary significantly depending on the landlord’s offerings. |
| Affordability | Generally more affordable than Purpose-Built Student Accommodations (PBSAs). |
| Flexible Financial Arrangements | Costs depend on factors such as location, property condition, and included services. |
| Bill Management | Tenants are responsible for managing their own bills, including utilities and internet, giving them more control over expenses. |
| Financial Management Skills | Managing bills in an HMO requires careful budgeting, providing a valuable learning experience in financial management and helping with the transition to adulthood. |
Cost vs. Convenience
While PBSA can be more expensive, it offers the convenience of a single payment that covers all your needs, including access to amenities and a sense of community. In contrast, HMOs are usually cheaper and allow for more flexible financial arrangements, but you’ll be responsible for managing and paying bills like utilities and internet.
The Importance of Personal Budgeting
Living in an HMO can be a valuable learning experience in personal budgeting and financial planning, an important milestone in the transition to adulthood. However, it requires a more hands-on approach to managing your finances.
Conclusion: Making the Right Choice
Choosing between PBSA and HMO depends on your individual preferences, lifestyle, and budget constraints. While PBSAs offer convenience and community, HMOs can provide a more affordable and flexible housing option. Consider what matters most to you—whether it’s cost, convenience, or the opportunity to develop budgeting skills—when making your decision.