Co-Living: What Makes it Work?

Co-living is becoming a more established part of Australia’s rental market. Housing pressures, a more mobile population and changing expectations around how and where people live are creating demand for more flexible housing options.

We think of co-living as build to rent for predominantly single-person households. For residents, the proposition is relatively simple: a furnished home, flexible lease terms, predictable costs and access to shared spaces, without the commitment or upfront expense of a traditional rental.

For developers, the opportunity is broader. Co-living can offer attractive yields, be suitable for sites that may not suit other forms of residential development and create new possibilities for the adaptive reuse of existing buildings. As more projects enter the market, the question is shifting from why co-living? to what makes it work?

1. Who is co-living really for?

There is no single co-living resident. It can appeal to someone newly arrived in Australia, a professional relocating to another city for work, or a younger person moving out of home alone or as a couple. What they often have in common is a need for flexibility and convenience.

Depending on the operator, leases can be shorter than those typically offered in the traditional rental market. Rooms are furnished, utilities and internet can be incorporated into the cost, and additional services may include cleaning, laundry and community events.

For someone who may not know where they will be in a year, buying furniture and signing a long lease may not make sense. Understanding these circumstances helps establish what a development needs to offer – and what residents will value most.

2. More amenity isn’t always better

There can be a temptation to sell co-living through amenity. More lounges. More communal areas. More things to put on the brochure. But residents still spend much of their time in their own rooms. Location, outlook, orientation, natural light and an efficient, functional layout remain fundamental to the quality of their home.

Shared amenities should complement that private space. Bookable dining rooms can give residents somewhere to host friends, while dedicated workspaces and acoustically treated video-call rooms support working from home. Sunny outdoor areas and BBQs offer opportunities to gather. Even small leftover spaces can become useful additions such as podcast rooms.

Each space needs a clear purpose, an appropriate size and a location that makes it easy to use. The lesson is simple: do a few things well rather than trying to provide everything.

3. Community can’t just be drawn on a plan

A communal lounge creates an opportunity for interaction. Whether residents use it – and feel comfortable meeting others there – also depends on how the building is managed.

Dinners, networking events, run clubs and other activities can help residents make connections, particularly when they are new to a city. Good programming gives people reasons to participate while respecting their preference for privacy.

Scale matters too. The number of residents, mix of room types and arrangement of shared spaces should inform how community activities are organised and supported. Larger developments may benefit from opportunities to connect in smaller groups, alongside events open to everyone.

Design provides the setting, but day-to-day management helps turn that setting into a community.

4. Could the best co-living building already exist?

One of co-living’s most interesting opportunities is adaptive reuse.

The model can work in buildings and on sites that may be difficult to adapt to more conventional forms of residential development. Existing offices, hotels and heritage
warehouses can all present opportunities, particularly when they are already in established locations close to transport, employment, education, nightlife and other amenity. Apt.Broadway demonstrates this potential, adapting an existing inner-city wool store for co-living and taking advantage of the building’s location and existing character.

The building itself still needs to work. Floorplate depth, structure, façade and window arrangements, natural light and access to communal outdoor space all influence the viability of conversion. Shallow floorplates can make adaptation relatively straightforward, while deeper buildings may require interventions such as lightwells or courtyards.

For the right asset, co-living can offer a new residential use without starting again.

5. Design for day one – and year ten

A co-living development has to work as an operational asset. Materials and finishes need to withstand frequent use, layouts should support efficient management and maintenance, and common areas need to provide value relative to their running costs.

These considerations belong in the early design process. Decisions about circulation, servicing, storage and access for maintenance can have lasting implications for the people managing and living in the building.

Developers also need to consider long-term ownership and potential sale. The requirements of future owners or operators can influence decisions around scale, design and room mix.

Addressing these questions early helps create a building that remains practical to operate as residents and ownership change.

6. What happens when residents have more choice?

Co-living is becoming more competitive. There are a growing number of developments in the pipeline, particularly in inner Sydney, and prospective residents are already scrutinising room size, inclusions and quality.

Location changes the equation too. In middle-ring suburbs, a co-living room may be competing directly with a nearby one-bedroom apartment, making the value proposition
particularly important.

The quality of co-living developments is improving, with greater attention to design and finishes. Co-living is also beginning to sit alongside other housing types within larger residential and mixed-use developments, rather than being delivered solely as a standalone product.

As co-living matures, success won’t come from squeezing in more rooms or adding more amenity. It will come from understanding who residents are, what they actually value and designing accordingly – while creating an asset that operates efficiently over the long term.

Interested in the future of co-living? Connect with Brian Mariotti on LinkedIn to continue the conversation.