What is co-living and why does it appeal to frustrated renters?

The worldwide co-living trend has taken off in Australia, with Millennials paying more than $500 a week for communal accommodation.

A handful of local companies – with one just bought out by Singaporean giant Hmlet –  have followed the lead of WeLive and Opendoor in the US and Lyvly, Vivahouse and the Collective in the UK to provide flexible renting arrangements targeted at young professionals in inner-city locations.

So, what’s the appeal? Rhys Williams, co-owner of local operator UKO, said flexibility was the key factor for many renters.

“For many people, renting is a long-term position but it shouldn’t be an unhappy position. You should be able to rent and enjoy it.”

After operating extended-stay furnished accommodation for several years, he and co-owner Alex Thorpe wanted to improve the renting experience.

“It wasn’t meeting the needs of the younger Millennial rental market, and the broader rental market as a whole,” Williams said.

Compact communal living

Williams said the UKO team looked at overseas co-living examples, but had a clear vision for the Australian market, settling on self-contained micro-apartments with communal facilities priced from $525 a week.

Studios are about 27 square metres and include a kitchenette, en suite and adjustable furniture. Laundries are shared, linens are changed every two weeks, and residents need to keep their own rooms clean.

The properties fall under the next-generation boarding house code, so residents sign a membership agreement instead of a lease. Six months is the average stay.

Membership includes internet and share car access, a fruit and vegetable is box provided on an honesty system, and there’s also a community host to organise opt-in social events.

Residents also have access to a 12-seat dining room which Williams said had proven popular for dinner parties.

Many of the trappings of traditional renting – including long-term contracts, dealing with utility providers and nagging property managers to make repairs – ran counter to what younger renters really wanted and needed, according to Williams.

He said the rise of the “digital nomad” meant it wasn’t practical for tenants to pay a bond, sign a lease and furnish an apartment, only to change jobs and cities before the lease was up.

Reinventing the share house

UKO residents include both local renters and people from interstate or overseas in Sydney for work or study, and not just Millennials.

“We’re delighted to see people from other generations are engaging with the product, and really enjoying the experience,” Williams said.

He said the company wanted rent payments to be viewed as a “social investment” rather than “dead money”.

“Our dream, our vision is that people can make long-lasting friendships or professional connections,” he said.

One UKO resident, Sydneysider Kay Thangarajah, said the social aspect attracted her to co-living, as did the flexibility and convenience.

“I saw the property on a Tuesday and moved in on the Sunday,” she said. “Electricity and internet was ready without having to do anything.

“It was definitely the least stressful move I have ever made.

“You can be social if you are feeling it, or you can stay in your accommodation if you don’t without feeling claustrophobic. But what I have loved most is actually knowing the people in my building.”

She said the setup would ideal for people moving from other cities and, while her original plan was to stay for six months, a longer residency was now on the cards.

Another resident, Danielle Beckett, recently moved to Sydney and found out about co-living on Instagram. She said the “self-made community” had exceeded her expectations.

“We are young professionals, so it’s nice that you can come home and have a chat with someone without having to leave the property,” she said. “You still get a social life without having to be out on the town.”

The flexibility is handy too, as work dictates how long she’ll stick around, but she’s glad she won’t have to deal with a real estate agent when she wants to leave.

“We did in Melbourne and it was just long and tiresome having to sort out trying to organise furniture, get bills sorted, only to move to Sydney four months later,” she said.

Affordability concerns

Tenants’​ Union of NSW senior policy officer Leo Patterson-Ross said the organisation hadn’t received any complaints from Sydney co-living residents, which didn’t surprise him considering the small number of operators in the niche market.

“We are supportive of people’s general choices of living, however style it is they want to live in,” he said.

“What people like about share houses is the social nature – often it’s like a surrogate family,” he said, but pointed out that it had arisen as an organic response to unaffordable housing.

He said there were concerns that some co-living spaces had been approved through affordable housing legislation, yet were priced at a premium.

“What we are concerned about is that they are leveraging the tenants’ crisis – pitching themselves to people who are giving up things that they wouldn’t necessarily give up otherwise,” he said.

“It is unlikely that this form of housing would arise in the absence of an affordability crisis.”