Chinese colleges and universities are turning to the purchase of existing residential properties and converting them into dormitories, a move analysts said could help alleviate the shortage of on-campus housing exacerbated by rising enrollment, and reduce a mounting inventory of empty units.

Hubei University in Wuhan, Central China's Hubei province, is one of the first institutions of higher learning to adopt such a strategy, converting 352 purchased commercial apartments into dormitories for students arriving this fall.

The apartments are situated just across the street from the university's Yangluo Campus. The academic buildings are a mere 10 minute walk from the converted residential complex.

"The average price of the units acquired in this purchase was slashed by over 35 percent compared to their initial listing prices," said Xu Tao, director of the real estate management department, which is part of the university's State-owned assets management office.

With a total investment of 198 million yuan ($27.9 million), these properties have created 2,800 new student beds, Xu said, adding that further such real estate acquisitions are in the works.

Wuhan University's decision to explore alternative solutions like off-campus housing is a direct response to an imbalance between housing supply and demand, particularly as a result of the growing enrollment of postgraduate students in recent years.

Previously, various universities — including Peking University, Fudan University and Nanjing University — announced that they would no longer be able to provide on-campus housing for professional master's degree students and will only offer such accommodation for the first year of their graduate studies.

"Given the current sales slump in the real estate sector, with enterprises facing tight liquidity, property developers would likely be very willing to sell entire buildings for one lump sum," said Chen Wenjing, director of policy research at the China Index Academy.

In the first 10 months of this year, the sales area of new commercial residential properties reached 719.82 million square meters, a year-on-year decrease of 6.8 percent, while sales value came in at 6.9 trillion yuan, down 9.6 percent, said the National Bureau of Statistics showed.

This market environment offers universities a chance to secure property acquisitions at potentially favorable terms, which could be more financially viable than universities using their own efforts and resources to build new dormitories from the ground up, Chen said.

As this practice gains traction, multiple colleges and universities have begun opting either for outright purchases or long-term leases of commercially developed housing to address student accommodation shortages.

In 2024, policymakers issued guidelines on strengthening the construction of student dormitories at schools, explicitly encouraging institutions of higher learning to supplement their housing resources by purchasing or leasing residential buildings and other commercial housing around their campuses.

In September, a release on the government service procurement information platform revealed that Hefei University of Technology, Central South University and China University of Mining and Technology have plans to purchase existing real estate properties to use as student dormitories.

If the model proves successful, it could offer a scalable template for many universities across China, turning vacant buildings into student communities and providing a measured, market-based tool for managing real estate inventory, said Li Yujia, chief researcher at the residential policy research center of the Guangdong Planning Institute.

wangkeju@chinadaily.com.cn