New wave of co-living developments gains momentum in Australian property market

A European-style housing model combining private apartments with shared living spaces is attracting significant investment in Australia’s major cities.

Recent sales of co-living development sites in Sydney have highlighted growing interest in the sector, with a Ryde property selling for $2.81 million and a Marrickville site fetching $4.85 million.

PGIM Real Estate has committed to developing a $750 million co-living portfolio across Sydney and Brisbane in partnership with Tribe, while Pro-Invest has raised $500 million to convert existing hotels and offices into co-living spaces.

Place Studio CEO James Alexander-Hatziplis said the model offered an alternative approach to traditional housing.

“Co-living developments are a modern European housing concept designed to provide a blend of private affordable apartments, coupled with increased communal living spaces,” he said.

Knight Frank agent Adam Droubi said the sector was performing strongly and predicted continued growth.

“We expect demand to continue throughout 2025, with demand for homes in Australia continuing to exceed available supply for the foreseeable future and housing affordability remaining an issue,” he said.

According to JLL research, co-living has emerged as one of the most actively traded asset classes worldwide since 2021, with Sydney accounting for more than 90 per cent of Australia’s co-living activity following the introduction of NSW Government planning guidelines.

The developments typically feature private bedrooms with ensuite bathrooms and kitchenettes, alongside shared facilities such as communal living areas, coworking spaces, and recreational amenities.

Alexander-Hatziplis said the model could improve housing affordability.

“By sharing some common amenities, whether it’s recreation areas, laundry facilities, BBQ areas, storage and/or parking – costs can be reduced, making it affordable for first-time home owners,” he said.