It’s in an area that the Aussies made their own. Though COVID-19 might have thinned things out a bit. In the past, some weren’t too bothered about the size of the rooms, as they saw it as just a place to sleep, rather than a place to live. In addition, the rooms were probably still a step up from the rooms their companion might have had; so their companions might have preferred to stay with them for a longer time, instead of back to a hot shared fan room. Things have changed somewhat since then.
Though of course a lot of new builds have equally small spaces; in some cases even smaller. Obviously good enough for some.