Friday, November 8, 2024

‘A race to the bottom’: People are turning to co-living to beat the rental market, but some say it’s a slippery slope

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More than 350,000 Australians are living as part of a group household according to data from the Australian Bureau of Statistics (ABS) — more than ever before.

While the ABS defines group housing as a household consisting of two unrelated people where all the residents are aged 15 years or older, they’re also referred to as share houses.

Demand for this type of accommodation has skyrocketed amid an exceedingly tight rental market and affordability crisis — and it’s left people looking for alternatives.

Some say co-living — housing where some spaces are shared with other residents — could be the solution.

But one planning expert believes the concept is a marketing ploy.

‘Three separate income streams’

One property development company called Gallery Group promotes co-living as “good value” for singles and couples, comparing the concept to a workplace.

“In the same way a co-working space is split into private offices, in a co-living house, those private spaces are the bedrooms,” the company’s website says.

One of the housing design options listed on the Gallery Group website.(colivingbygallery.com.au)

Each room is lockable, has an ensuite, and there’s secure storage in the kitchen, turning a single-family home into “three separate income streams”.

The developer coins it as “high income meeting capital growth” with the rooms available to rent across south-east Queensland, including in Deception Bay, Logan and Upper Coomera.

On the company’s website, it states three self-contained rooms each rent for a “minimum of $275 per week”, for a weekly total of $825, which is a “vast improvement on the same sized family home counterpart of $450 per week”.

Co-living rooms are currently listed on Clique Living — which is connected to Gallery Group — at $300 per week, which would secure the owner $900 a week in rent.

A computer-generated rendering of the front of a home with setting sky in the background.

Other development and construction groups are also offering co-living properties.(heapsgoodhomes.com.au)

Gallery Group isn’t the only developer spruiking the returns — Heaps Good Homes, which lists co-living properties across Australia, say they’re a “perfect combination of capital growth and maximum cashflow”.

Victorian House and Land Specialists development group says a three-bedroom co-living property yields higher rental returns compared to renting it as a standard home, calling the concept a “lucrative investment”.

New South Wales group, High Income Property Prosperity Solutions, suggests owners could use the “entire space [of a property] more effectively”, saying it would lead to a “significant increase in rental income”.

‘Winding back expectations’

Mark Limb, a senior lecturer in urban and regional planning at QUT, believes the co-living properties are “basically” boarding houses.

Queensland University of Technology Urban Planner Mark Limb.

Queensland University of Technology Urban Planner Mark Limb.(ABC News: Crystalyn Brown)

“In Queensland, [this accommodation] is generally defined as a rooming accommodation, which is basically a boarding house,” Dr Limb says.

Except, he says, it isn’t offering the affordability that often comes with share houses.

“It’s a rent maximisation thing,” he says.

Dr Limb says people may be turning to this type of accommodation because the current housing crisis promotes the idea of settling for alternatives.

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