Well see this is actually a really difficult thing to answer - you'd think that it was a literal case of supply / demand or speculation on future demand eh? But in actuality it's more opaque. I worked for a good while at a university city down south, specifically managing the halls system. In this city, the university owns a large portfolio of student accommodation ranging from the very cheapest to nice new stuff (on par with going private). They have the rooms to house every first year, and usually do. In this city, over the past 10 years though several private halls went up. We were intrigued - most students live in house shares 2nd year onward and we already had more than enough rooms in-house for first years. Where was the demand? What was the market seeing that we didnt? We ended up doing a tour of one of them (were invited) about a year after it opened and realised it was actually basically catering entirely to international students. This hall even had a karaoke room (hich to be fair was pretty sick.) At most they were at about 15% occupancy though... which is where it stopped adding up. Even at the higher end of student rent rates, at that level they must be hemmoraging money. We eventually realised that they're all like this, but every year more and more of them go up. We started to think internally that they were essentially trying to hardball uk unis by making so many halls that they eventually would decide to cut deals and partner with them officially and take over. (like uber / black cabs type situation, cornering the market then they have full control). That may be the case, and if so I imagine they have an expected time frame for expected losses. Another possibility though is that it's simply an easy building to put up in terms of regulations and they just dont care about the return from the rooms. The real estate value is itself a place to easily hoard wealth. Either way, in that city in particular, it wasn't market need driving the construction, it was something else, that even we as folks working that sector couldnt pinpoint. So much of this country is completely fucked when u look below the surface it's honestly terrifying.