Co-living property investment provides an adaptable solution to the rising housing costs in the Australian property market.
Latest Property Market News: Vacancy Rates Hit Record Lows
Recent data from PropTrack reveals that the rental property market in Australia continues to tighten, with vacancy rates reaching a new historic low. The national rental vacancy rate stands at a mere 1.10%, after falling 0.14 percentage points in August. (See chart).
New data from the Australia Bureau of Statistics (ABS) reveals that Australia’s population has reached 26.5 million individuals, primarily driven by a significant increase in migration post-COVID-19 pandemic.
In the 12 months leading up to March 2023, the country experienced a population growth of 2.2 percent – the fastest pace since late 2008. Notably, the influx of migrants amounted to a total of 454,400 individuals.
However, the supply of new housing has not kept pace with this robust demand. Construction approvals remained low, and construction activity has slowed down. Consequently, this discrepancy between demand and supply is exacerbating the existing housing shortage.
The historical tightness of most property markets makes it exceedingly difficult for renters to secure housing, leading to a notable increase in weekly rents. Advertised rents in the capital cities have surged by 14.6% year-on-year as of August 2023. (See chart).
The housing affordability crisis is particularly severe for individuals with low incomes and those relying on welfare benefits, as they are confronting a market that has never been less affordable.
Considering this, tenants are inclined to seek more cost-effective options, starting with individual units but potentially transitioning to shared housing arrangements.
Why Co-Living Property is a Strategic Investment
In a property market characterised by record-low vacancy rates and increasing demand, investors are looking for strategic opportunities. Co-living properties have emerged as a smart investment avenue in this scenario.
Co-living spaces present a solution to the housing crunch by optimising available space and fostering a sense of community among residents. These innovative properties allow multiple tenants to live comfortably under one roof, sharing not only space but also the associated costs.
For investors, co-living properties offer an enticing proposition. They provide a unique advantage over traditional rental properties by accommodating multiple tenants simultaneously. This communal living setup translates into a robust rental income stream, promising attractive returns on investment.
Moreover, co-living properties help mitigate the risks associated with vacancies. In traditional rental properties, if one tenant leaves, the entire unit may remain vacant until a replacement is found. In contrast, co-living properties ensure a more stable cash flow, as, when one tenant leaves, the remaining occupants continue to pay their share of the rent.
With demand outpacing supply and rental conditions remaining tight, co-living properties align perfectly with the financial goals of investors at all levels of expertise. These properties not only offer unique income potential but also provide an innovative solution to the current challenges in the Australian property market.
Is it a good time to buy?
Given that we’re in a landlord’s market and things are unlikely to change anytime soon, many property investors are in a strong position right now. (If your financial circumstances allow).
Investors looking to diversify their portfolios and capitalise on the rising demand for flexible, community-oriented living spaces should consider exploring the promising world of co-living property investments in Australia.
For expert guidance and property options tailored to your investment goals, reach out to our property research specialists today.
Whether you’re an experienced investor or just starting, we have the knowledge and expertise to help you make informed decisions and achieve your financial objectives. To discuss your options, schedule an online meeting or call (02) 8007 4001.