“Why Co-Living Is the Go-To Strategy for High-Yield Property Investors in Australia.”
For years, shared accommodation has carried a stigma—confused with boarding houses or temporary housing. But that perception is shifting rapidly. Today, CoLiving is one of the fastest-growing, high-yield property investment strategies in Australia, attracting attention from institutional buyers, private equity, and forward-thinking investors.
With low vacancy rates, rising rents, and shifting lifestyle trends, Co-Living is proving to be a highly adaptive and lucrative asset class in Australia and in particular in markets like Sydney and Melbourne.
Demand Is Rising – And Investors Are Moving Fast
When CBRE brought a Sydney apartment building at 15 Springfield Avenue to market, interest came from every direction—hotels, build-to-rent, and co-living sectors. But it was the co-living buyers who led the pack.
“Co-living quickly became the focus,” said Tom Gibson, NSW director of CBRE Hotels. “Investors adopting alternative strategies simply couldn’t compete with the competitive nature of the co-living sector buyers.”
Why? Because co-living buyers are seeking assets that offer value, flexibility, and quick conversion potential—and they’re willing to pay for it.
Conversions can Offer Easy Entry for Co-Living Investors
Not all asset conversions are equal. Be mindful of what your tenants in your location are prepared to live in, are you building or developing for them, or for your own Yield? What is the sweet spot for investors?
Build New or Convert? Why Purpose-Built Co-Living Wins
Thinking about converting an existing property into a co-living home? Ask anyone who’s been through the renovation process, and they’ll likely tell you it’s rarely smooth sailing. From hidden issues behind walls to costly design compromises, modifying older properties can come with unexpected challenges and expenses.
Now compare that to starting fresh.
When you secure a block of land and build a purpose-designed co-living home, you gain a range of benefits:
- A layout tailored specifically to the CoLiving model
- Fewer construction surprises and delays
- Higher tax depreciation benefits on the building and its fittings
- Greater appeal to tenants seeking comfort, space, and privacy
Today’s co-living tenants prefer homes that are intentionally designed to balance shared spaces with private amenities. In contrast, many renovations try to retrofit more rooms into existing spaces, often at the expense of livability—and long-term tenant satisfaction.
In short, a purpose-built Co-Living property not only performs better as an investment but also saves you time, stress, and money in the long run. It’s a smarter, more sustainable way to build a high-yielding asset that attracts quality tenants and delivers consistent returns.
Planning Policy and Zoning: What will your local council approve?
Not all states are equally supportive of co-living development. Not all Councils will approve them and if they do, under what building code / building class will your application be approved under?
“This type of housing offers greater diversity of choice,” says Helen Kuo, Principal at FK Architects. “It’s no longer about cramming people into rooms—it’s about offering flexibility, affordability, and community in a sustainable format.”
But challenges still exist, especially around approvals, parking requirements, and outdated zoning rules. “Consent authorities often plan to avoid worst-case scenarios,” Kuo explains. “But that can prevent innovation.”
Offshore Investors Are Eyeing Australia’s Co-Living Sector
Australia’s emerging co-living market is attracting global capital from private equity and family offices, particularly those with a regional strategy across Asia-Pacific. Firms like BGO and Hotel Capital Partners are actively acquiring co-living assets, drawn by Australia’s market stability, urban demand, and strong rental returns.
“Acquiring scale is crucial,” says Gibson. “These buyers believe in the growth and resilience of the Australian co-living market.”
And the numbers back it up. Weekly co-living rents, per room, average between $320 and $380, depending on location, number of bedrooms, shared or private facilities etc. While that’s comparable to standard units, the per-square-metre return is significantly higher with a CoLiving home.
Melbourne Is Primed for Rental Growth
Melbourne offers a compelling opportunity, with vacancy rates remaining low, supply very low and rents rising post-Covid. Yet, rental yields in Melbourne still lag behind Sydney and SEQ, offering headroom for capital growth.
“There’s a gap in rental values that’s wider than it should be,” says UKO founder Rhys Williams. “This presents a great chance for developers/investors and owners to maximise returns.”
However, barriers remain—particularly for foreign investors in Victoria, where tax structures are more prohibitive compared to other states. Navigating local planning and tax policies remains key to unlocking the sector’s full potential. If the Co-Living home is a Class 1B, they will be exempt from Land Tax in Victoria, saving investors thousands of $’s over the life of the investment.
The Bottom Line: Co-Living Is Here to Stay
The shift in perception around CoLiving is real – and irreversible. What was once seen as fringe or “transitional housing” is now understood as a strategic, scalable solution to housing pressures and rental demand in Australia’s urban and regional centres.
For investors, that means an opportunity to:
- Achieve high yields in low-supply markets
- Enter the market with a reasonable budget
- Tap into growing tenant demand from students, professionals, mature singles and lifestyle renters
- Potentially revalue, enjoy instant equity uplift, so you may invest again that much sooner
If you’re serious about high-performance investment property, Co-Living deserves a place in your portfolio strategy.
Co-Living Investment Property Australia
Unlocking Equity Uplift with Co-Living Investments
An exciting trend we’re seeing with Co-Living properties is the potential for the probable instant equity uplift once the home is completed and fully tenanted. This means you may be able to revalue the property with your lender and access additional equity – often without waiting years for traditional capital growth.
With this equity uplift—combined with the strong rental yields Co-Living properties typically generate, you may be in a position to leverage into your next investment sooner. Thus accelerating your own financial planning goals that much more effectively.
It’s a smart strategy that can help accelerate your wealth creation and financial planning goals, giving you and your family a stronger foundation for long-term success.
Location
Just because a sales group is marketing and or building a CoLiving it does not mean it is worthy of any ones investment dollars. There is a lot of spruiking going on in this space now, and locations where entry values into the market are low, and thus projected yields are high (on paper), does not necessarily equate to being investment worthy or have an ability to attract and hold onto tenants.
When doing your due diligence be mindful of Location, supply to that area, floor plan design, number of bedrooms, potential vacancy rates etc. When one knows what to be aware of, this investment can mitigate risk other properties may incur.
When you don’t know what it is that you do not know about CoLiving, how can you make an informed decision?
Interested in Exploring Co-Living Investment Opportunities?
At properT network, we’ve been helping investors like you secure investment-grade, high-yield properties across Australia for over 19 years. Whether you’re local or overseas, new to property or expanding your portfolio, we can help you identify and secure the right co-living assets for your goals.
Let’s start a conversation about how to make co-living part of your wealth-building strategy.
NB : Be EXCEPTIONALLY mindful of Location
Avoid what has occurred in NDIS space, chasing high yields on Paper !!!
