Co-Living: The New Developments Disrupting Australian Real Estate
Co-living feeds global demand for a new way of renting that puts community and convenience ahead of traditional values
On 21 September 2018 Veriu co-founders, Alex Thorpe and Rhys Williams, unveiled Australia’s first new-generation co-living complex: 33 studio apartments in a development in Sydney’s inner-west suburb of Stanmore. This is the first instalment of Thorpe and Williams’ UKO co-living brand, but it won’t be the last: other UKO properties are set to roll out in nearby Newtown, and in Paddington in Sydney’s Eastern Suburbs, from 2019.
Image by UKO Stanmore, NSW
What is co-living?
Co-living complexes take the form of rented studio apartments in a development that’s owned by a single company or landlord. Generally, each studio within the co-living complex is fully furnished and the rental cost usually covers utility bills, wifi, cleaning, laundry services, and sometimes co-working spaces. Co-living is something of a disruptor to the traditional real estate industry and is a sub-market of the build-to-rent sector.
But crucially, co-living properties give their tenants access to shared common areas and many employ a dedicated host who organises activities and a social calendar to create a sense of community within the development.
What is co-living?
Co-living complexes take the form of rented studio apartments in a development that’s owned by a single company or landlord. Generally, each studio within the co-living complex is fully furnished and the rental cost usually covers utility bills, wifi, cleaning, laundry services, and sometimes co-working spaces. Co-living is something of a disruptor to the traditional real estate industry and is a sub-market of the build-to-rent sector.
But crucially, co-living properties give their tenants access to shared common areas and many employ a dedicated host who organises activities and a social calendar to create a sense of community within the development.
Image by UKO Stanmore, NSW
How does this new rental model differentiate itself?
“We want to create a place that blends the concepts of live, work, learn and play into something more relevant,” says UKO’s general manager, David Fitzpatrick. “At UKO we want people to really feel like the communal areas are an extension of their room, like a giant lounge room or kitchen area. This is where the host will hang, and atmosphere will be created. Instead of coming home to an empty apartment and watching TV all night, guests will have the option of heading downstairs and having a glass of wine or sharing a meal with like-minded people.”
How does this new rental model differentiate itself?
“We want to create a place that blends the concepts of live, work, learn and play into something more relevant,” says UKO’s general manager, David Fitzpatrick. “At UKO we want people to really feel like the communal areas are an extension of their room, like a giant lounge room or kitchen area. This is where the host will hang, and atmosphere will be created. Instead of coming home to an empty apartment and watching TV all night, guests will have the option of heading downstairs and having a glass of wine or sharing a meal with like-minded people.”
Image by Caper Co-Living
Where are co-living properties appearing?
It’s not a coincidence that each of the co-living properties to announce itself in Australia is located in Sydney’s inner-city areas and corridors of long-term growth. Paul is already looking to work with other partners in Sydney and Melbourne and has plans to roll-out further co-living developments.
What’s the expected tenure for tenants?
“We will look to offer 12-month memberships to begin with and eventually offer shorter memberships as our business scales,” says Paul. “We anticipate an average tenure of 1.5 years on average across our co-living properties.”
Where are co-living properties appearing?
It’s not a coincidence that each of the co-living properties to announce itself in Australia is located in Sydney’s inner-city areas and corridors of long-term growth. Paul is already looking to work with other partners in Sydney and Melbourne and has plans to roll-out further co-living developments.
What’s the expected tenure for tenants?
“We will look to offer 12-month memberships to begin with and eventually offer shorter memberships as our business scales,” says Paul. “We anticipate an average tenure of 1.5 years on average across our co-living properties.”
Image by Caper Co-Living
Who is the target market?
“To begin with, we see our core demographic being millennials who are seeking a superior living experience compared to a traditional rental property,” says Paul. Paul started Caper Co-Living as a millennial himself, after becoming frustrated with paying upwards of 30 percent of his income on rent alone, while feeling overlooked and underserved as a tenant, despite advances in available technology.
It’s Time to Reconnect: 10 Ways Your Home Can Create a Community
Who is the target market?
“To begin with, we see our core demographic being millennials who are seeking a superior living experience compared to a traditional rental property,” says Paul. Paul started Caper Co-Living as a millennial himself, after becoming frustrated with paying upwards of 30 percent of his income on rent alone, while feeling overlooked and underserved as a tenant, despite advances in available technology.
It’s Time to Reconnect: 10 Ways Your Home Can Create a Community
Image by Caper Co-Living
“Co-living plays to the demands that are unique to the millennial generation,” says Paul.
“First, this includes mobility, where millennials do not want to be tied down and want the freedom to move and experience new things. Second, millennials are much more likely to invest in acquiring experiences than material assets, which extends to property, cars and even things like furniture. And third, millennials are seeking out a strong sense of community to combat the increased levels of loneliness and disengagement that are being endured as a result of a technological age.”
“Co-living plays to the demands that are unique to the millennial generation,” says Paul.
“First, this includes mobility, where millennials do not want to be tied down and want the freedom to move and experience new things. Second, millennials are much more likely to invest in acquiring experiences than material assets, which extends to property, cars and even things like furniture. And third, millennials are seeking out a strong sense of community to combat the increased levels of loneliness and disengagement that are being endured as a result of a technological age.”
Image by UKO Stanmore, NSW
Why is there demand for co-living properties?
If you think co-living properties are simply the latest craze for beanbag-loving, quinoa-munching millennials who are keen to live in a trendy part of town, then think again. Likewise, if these developments strike you as receptacles for hipsters who are keen to blow their hard-earned pennies on overpriced non-essentials instead of putting a deposit on a home, then let’s dig a little deeper. People are not just flocking to co-living properties for the benefits they offer; many are drawn to them out of sheer necessity.
Why is there demand for co-living properties?
If you think co-living properties are simply the latest craze for beanbag-loving, quinoa-munching millennials who are keen to live in a trendy part of town, then think again. Likewise, if these developments strike you as receptacles for hipsters who are keen to blow their hard-earned pennies on overpriced non-essentials instead of putting a deposit on a home, then let’s dig a little deeper. People are not just flocking to co-living properties for the benefits they offer; many are drawn to them out of sheer necessity.
UKO ensuite
“There is a growing mindset that people are constantly forced to compromise on how they live and work, especially in growing urban cities such as Sydney,” say Thorpe and Williams. “We want people to feel that they are getting a return on their rent, almost as an investment, rather than dead money. We do this by offering access to a personal and professional network facilitated by the on-site community host.”
“There is a growing mindset that people are constantly forced to compromise on how they live and work, especially in growing urban cities such as Sydney,” say Thorpe and Williams. “We want people to feel that they are getting a return on their rent, almost as an investment, rather than dead money. We do this by offering access to a personal and professional network facilitated by the on-site community host.”
Is inner-city real estate in Australia really that expensive?
In a word, yes. According to the Australian Bureau of Statistics and Macquarie Private Wealth, in 2017 Sydney’s median house price was $1,111,124, Melbourne’s was $847,432, and Brisbane and South-East Queensland landed in third place at $517,539.
Many young Australians simply cannot afford to save for a deposit in the current rental market, let alone service the sizeable mortgage needed to buy such expensive property. Even in a cooling property market, Australia’s housing prices have jumped 70 percent in the past five years, while wages have grown a sluggish 13 percent.
In a word, yes. According to the Australian Bureau of Statistics and Macquarie Private Wealth, in 2017 Sydney’s median house price was $1,111,124, Melbourne’s was $847,432, and Brisbane and South-East Queensland landed in third place at $517,539.
Many young Australians simply cannot afford to save for a deposit in the current rental market, let alone service the sizeable mortgage needed to buy such expensive property. Even in a cooling property market, Australia’s housing prices have jumped 70 percent in the past five years, while wages have grown a sluggish 13 percent.
Image by Caper Co-Living
To view the issue with a longer-term perspective, a 2017 paper from the Bank for International Settlements reported that Australian house prices have surged by a staggering 300 to 400 per cent since the early 1960s.
This prohibitive combination of factors has led many younger generations to give up hope on ever achieving the great Australian dream of owning a home. Instead, many have had to recalibrate their expectations and seek out value in building a community and forging meaningful living experiences in new and different ways.
Now and Then: How Australian Life Has Changed in a Generation
To view the issue with a longer-term perspective, a 2017 paper from the Bank for International Settlements reported that Australian house prices have surged by a staggering 300 to 400 per cent since the early 1960s.
This prohibitive combination of factors has led many younger generations to give up hope on ever achieving the great Australian dream of owning a home. Instead, many have had to recalibrate their expectations and seek out value in building a community and forging meaningful living experiences in new and different ways.
Now and Then: How Australian Life Has Changed in a Generation
UKO Flex Room
How much do co-living studios cost?
Launched in September 2018, UKO’s co-living properties in Stanmore are priced from $525 per week for a 24-square-metre ‘Flex’ studio space (pictured above and next), to $595 per week for a 28-square-metre ‘Loft’ studio with city views. All rooms include a private kitchenette, ensuite, wifi, TV, modular furniture, and a double- or queen-sized bed, as well as access to shared common areas and events. In a savvy move that’s sure to enhance loyalty and community cohesion, the longer you stay at UKO, the less rent you pay.
Caper Co-Living’s developments offer similar facilities as well as dedicated co-working spaces. The company’s Petersham co-living studios are priced at $430 per week, while its Newtown-based studios cost $525 per week.
How much do co-living studios cost?
Launched in September 2018, UKO’s co-living properties in Stanmore are priced from $525 per week for a 24-square-metre ‘Flex’ studio space (pictured above and next), to $595 per week for a 28-square-metre ‘Loft’ studio with city views. All rooms include a private kitchenette, ensuite, wifi, TV, modular furniture, and a double- or queen-sized bed, as well as access to shared common areas and events. In a savvy move that’s sure to enhance loyalty and community cohesion, the longer you stay at UKO, the less rent you pay.
Caper Co-Living’s developments offer similar facilities as well as dedicated co-working spaces. The company’s Petersham co-living studios are priced at $430 per week, while its Newtown-based studios cost $525 per week.
UKO Flex Room
If these prices for co-living studios strike you as expensive compared to similar rental properties in these suburbs, you’re right… until you factor in the extra services such as cleaning, utility bills, furniture and co-working office space. If you adopt more millennial metrics and add the incalculable value of built-in community and friendships, one can begin to understand why for some people this might feel like a bargain.
Browse more compact living areas
If these prices for co-living studios strike you as expensive compared to similar rental properties in these suburbs, you’re right… until you factor in the extra services such as cleaning, utility bills, furniture and co-working office space. If you adopt more millennial metrics and add the incalculable value of built-in community and friendships, one can begin to understand why for some people this might feel like a bargain.
Browse more compact living areas
Are there any historical or global comparisons?
Plenty. Co-living recently gained traction in New York and across the US with its so-called ‘micro-apartments’, while similar trends are being seen in Asia and Britain. Companies such as WeLive, the Collective and Common have made an impact with similar co-living properties.
The popularity of boarding houses may have waned in the past few decades, though for much of the twentieth century they operated on a similar concept to many contemporary co-living complexes. University colleges and on-campus accommodation also share some similarities to co-living developments, as do retirement developments, particularly with regard to their focus on belonging to a community and building friendships and networks.
Plenty. Co-living recently gained traction in New York and across the US with its so-called ‘micro-apartments’, while similar trends are being seen in Asia and Britain. Companies such as WeLive, the Collective and Common have made an impact with similar co-living properties.
The popularity of boarding houses may have waned in the past few decades, though for much of the twentieth century they operated on a similar concept to many contemporary co-living complexes. University colleges and on-campus accommodation also share some similarities to co-living developments, as do retirement developments, particularly with regard to their focus on belonging to a community and building friendships and networks.
Although different to co-living, Eugene Cheah and Joanne Saw, co-directors of Cheah Saw Architecture, created their Fairfield development in Melbourne with a similar ideology in mind. “We have designed these residences with the experiences of daily living at heart,” say Cheah and Saw.
The development targets the owner-occupier and downsizer market and has literally turned the notion of a penthouse upside down: spacious, single-storey ground-floor dwellings let mature downsizes ‘age in place’, while double-storey townhouses more suitable to young families sit atop the ground-floor penthouses. Both designs have an emphasis on being strongly connected to their community and immediate surrounds while retaining their privacy.
What does the future hold for co-living?
“In Australia, we see Caper Co-Living appealing to mostly young professionals, as well as university students – both locals and from overseas,” says Paul. “Over time, we want to create new iterations of our model to cater to other demographics, such as single mothers with children, young families and empty nesters.”
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“In Australia, we see Caper Co-Living appealing to mostly young professionals, as well as university students – both locals and from overseas,” says Paul. “Over time, we want to create new iterations of our model to cater to other demographics, such as single mothers with children, young families and empty nesters.”
Tell us
What aspects of the co-living concept appeal to you? Share your thoughts in the Comments below, save this story and the images, and join the conversation.
More
Find removalists or storage services near you
Houzz caught up with these co-living trailblazers to find out what this new trend is, why it’s popular, who wants in, and what the future holds for co-living in Australia.