High rents and low vacancies are forcing students to live in ‘ghettos' and the government must stimulate public-private development if it is to retain international revenue, a university group claims.

International students are choosing to share rooms in order to cut costs and developers should consider cheaper dorm-rooms as an option, providing they remain safe and well supported, the group said.

Vacancy rates in some Australian inner-city suburbs are as low as 1.1 per cent, where 3 per cent is generally considered acceptable. The Australian Technology Network (ATN) of universities said this is forcing students ever wider in the search for accommodation, often to unsafe locations.

The situation is causing students “housing stress”, ATN said in a submission to the Senate and it is calling on the federal government to extend the National Rental Affordability Scheme to include the education sector.

Specialist providers of student accommodation have “rigid” housing models that fail to incorporate affordable options, the submission said.

In addressing this end of the market only, universities and their private accommodation partners have often ignored the less affluent student, ATN said.

“Some more creative solutions are required to address the issue of providing students with a positive and affordable living experience. Many of these ‘affordable’ options also often appeal to the Y generation’s growing sensitivity to responsible use of resources.”

ATN is pushing the federal government to invest and develop creative, affordable housing solution.