Sellers' bounty from mutiny


A legal revolt by a group of investors this year successfully challenged the contract restriction on student-only accommodation and assumed control of the body corporate from YMCA Victoria.

In the past few months, investors who had battled for a decade to reclaim money spent on almost 700 off-the-plan apartments designed for University of Melbourne international students have been selling on the open market.

Owner-occupiers, first-home buyers and mainstream tenants have started to move in, displacing students.

Investor Michael Petit, who led the revolt, was one of the first to sell his apartment on the open market. It fetched $190,000 last month - a $21,000 profit.

''It's not a great return on a 10-year investment, but it beats $130,000 which the real estate agents were telling me I'd get eight months ago,'' he said.

''For years people were taking a bath on the value of these apartments in the middle of Carlton, losing tens of thousands of dollars, because the market was reduced to just student accommodation. We wanted a capital gain on our investment.''

The investor mutiny has seen more than 100 apartments sold or leased on the open market this year, with nine for sale.

The competition has also resulted in apartment rent increases of up to 13 per cent.

Mr Petit was able to prove the planning permit for College Square on the old VicRoads site placed no restriction on it being used as student accommodation. The permit for its newer, sister development, College Square on Swanston Street, does have such a stipulation.

YMCA development general manager Glyn Davies said 80 per cent of investors were happy and had re-signed management contracts with the YMCA because of the comparatively high rental yields.

''Long term, it will remain predominantly student accommodation,'' he said. ''Those owner-occupiers that are buying in seem to be younger people themselves, the first-home buyers, so I don't think the culture is going to shift.''

However, tenancy advocates say the situation will worsen the housing crisis for students, who are disadvantaged when competing for mainstream rental accommodation, especially in the sought-after inner north. The problem is compounded for overseas students, many of whom do not speak fluent English, have no references from landlords and no experience of the rental process, they say.

Suyan Ng, incoming president of Melbourne University Overseas Services, said the twin College Square villages were among the most popular accommodation for international students, but that was under threat.

''There are a large number of international students here in Melbourne; competition is really, really tough,'' she said. ''Students have few options of where to choose. They tend to want places close to where they study, within their comfort zone, and are willing to pay a higher price. But, even so, prices at College Square have risen drastically. They are really, really steep.''



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