Why Sydney leads Australia’s co-living market

The Australian dream is evolving. With home ownership becoming increasingly out of reach for young Australians, alternative ways of living have emerged. Co-living offers a contemporary solution. Residents rent private furnished bedrooms or studio apartments within a shared residential building, gaining access to communal spaces and shared amenities.

Cost, community and flexibility are driving demand. With rents and property prices rising, younger renters are looking for alternatives that stretch their pay further. In a co-living building, rent is typically a single bundled weekly figure covering the room, utilities and furnishings, with minimum tenancies of three months rather than the conventional twelve. Schemes are also usually built in well-connected areas, giving residents easy access to work, study and recreation. Shared spaces and community activities also attract people, offering a ready-made network of like-minded residents. The renter base is broadening too, with key workers increasingly drawn to the model alongside students and young professionals.

Supply is following that demand. JLL Research is currently tracking 52 operational co-living assets across Australia, with 40 of which are in Sydney. The city accounts for 77% of the national total, with 12 assets in the Inner West and 10 in the City of Sydney, which together make up more than half the city’s stock. UKO is currently the largest operator by some distance, running 25 of the 52 operational assets nationally, at 48%, 24 of them in Sydney. This current stock is typically characterised by smaller buildings, particularly in Sydney, where many buildings are converted from older apartment stock.

Figure 1: Sydney’s co-living supply

Source: JLL Research, 3Q26

So, why does Sydney have so many co-living assets? The answer lies in planning. When the NSW State Environmental Planning Policy (Housing) was created in November 2021, it introduced co-living as a distinct form of housing. Under the policy, co-living housing must have at least six private rooms, fully furnished private and shared spaces and a manager responsible for the shared spaces. Unlike boarding houses, it has no affordability requirement and attracts a 10% floor space ratio bonus. Together, these rules gave developers a clear, dedicated pathway to deliver co-living.

Sydney’s co-living sector is entering a new phase. As the market matures, developers are delivering more institutional-grade assets, and the shift is most visible in the scale of projects being delivered. Today’s blocks of around 25 units are giving way to large, community-scale developments averaging around 80 units. JLL Research is tracking more than 20 projects exceeding 100 units. Other cities are starting from a lower base: Brisbane, Perth and Adelaide have no operating assets today, but JLL Research is tracking 17 in the pipeline between them, with 40% of these projects exceeding 100 units.

The next few years will not only be defined by planning approvals, but by execution. In a challenging construction and financing environment, the developers who can bridge the gap between an approved blueprint and a completed building will come out ahead.