Australia’s rental property market has faced numerous challenges in recent years. Skyrocketing housing prices have made it increasingly difficult for individuals and families to find affordable rental properties, raising concerns about housing accessibility, particularly for young professionals, students, and those on lower incomes.
According to Corelogic, Monthly Housing Rental prices at the national level have experienced continuous growth for 35 consecutive months, marking the longest uninterrupted increase since 2013. (See Chart)
With rising housing costs and a growing rental property crisis, the property market faces a new trend that’s emerging as a potential game-changer.
Rental Property Evolution
Enter co-living properties—a groundbreaking concept that’s revolutionising the traditional rental property landscape. In today’s fast-paced world, the way we live and work is evolving, and co-living stands at the forefront of this exciting transformation. It offers a fresh and innovative approach to housing that not only addresses the housing shortage but also provides a dynamic solution to the challenges of urban living.
This housing solution brings HIP benefits to the table.
The HIP Benefits
H: Housing Affordability
This investment property embodies the spirit of shared living, fostering a sense of community and cooperation among its residents. These innovative spaces are designed with efficiency and functionality in mind, optimising the utilisation of available space and resources. The result? An environment where multiple tenants can comfortably coexist under a single roof, sharing not only the space but also the associated costs.
I: Investment Potential
For investors in the real estate market, co-living shines as a compelling prospect. Their allure lies in the undeniable Investment Potential they offer. Unlike traditional rental properties, co-living spaces have a unique advantage – they can house multiple tenants under one roof. This translates into a robust rental income stream that promises attractive returns on investment.
Moreover, it helps alleviate the issue of vacant properties. In a typical rental property scenario, when one tenant leaves, the entire unit might remain unoccupied until they find a replacement. In contrast, in this setup, if one tenant leaves, the remaining occupants continue paying their share of the rent, ensuring a consistent income stream for property owners and reducing the impact of vacancies.
In essence, co-living properties emerge as a strategically astute Investment Avenue. Their appeal resonates with both seasoned investors seeking to diversify their portfolios and newcomers looking for a promising entry point into real estate investment. With its unique income potential and smart cost-sharing mechanisms, co-living aligns perfectly with the financial goals of investors at all levels of expertise.
P: Population Growth
Lastly, the surge in population has created a heightened demand for housing solutions across the country. This is fueled by a combination of increasing domestic migration and international arrivals. Co-living properties, with their adaptable and communal living setups, are strategically poised to address this surging need.
The appeal of co-living properties extends particularly to newcomers in search of rental accommodations. The flexible and community-oriented living arrangements they offer provide an attractive solution for individuals looking for housing that not only meets their practical needs but also facilitates social interaction and a sense of belonging in their new environment.
In fact, Matusik reaffirms that the demand for new homes will remain high. This is driven by a projected rise in the annual population growth rate over the next five to ten years (See Chart).
As the Property Market evolves, co-living properties offer affordability and impressive rental yields. Their HIP benefits are transforming perceptions of rental properties in Australia.
Ready to explore the promising world of co-living property investments in Australia? Don’t miss this opportunity to diversify your portfolio and capitalise on the rising demand for flexible, community-oriented living spaces.
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.