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The Co-Living trend has blossomed amongst Millennials and the over-65s in the residential space. It is a form of housing where residents share living space and a set of interests and values. The trend stems from hyper-urban hubs that have embraced the sharing economy as a lifestyle choice. In its most basic form, co-living sees people share spaces and mutual facilities to save money and inspire collaborative ideas or provide comfortable, more acceptable living conditions.
The trend originated from the basic premise of student housing, driven by the rising cost of real estate in urban centres. Co-living communities typically provide short-term accommodation and host various events for their inhabitants. They may consist of students, entrepreneurs, artists or even Baby Boomers, who find themselves mortgage-free with no familial responsibilities; able to downsize, move around and live out their older years in the way that suits them best.
The sharing economy phenomenon has already made a mark in areas such as cars, clothing and general peer-to-peer platforms, so it is no surprise that real estate has become the next focus for disruption. The world of start-ups and venture capitalists has become big business, and co-living has become the alternative accelerator ecosystem for smart minds and out-of-the-box thinkers.
Millennials are much less attached to fixed belongings such as vehicles, houses and clothing than previous generations. They are more flexible, mobile and adventurous. In real estate, this has translated into greater demand for rentals rather than mortgages amongst this demographic. In the US, for example, the Millennial generation has fuelled the demand for rental apartments. This is particularly important, since following a rise in the birth rate and immigration, Millennials now outnumber Generation X, those born between 1965 and 1979.
Markets with progressive start-up landscapes and high rents are amongst the most fertile spots for co-living arrangements. This includes Asian urban hubs such as Hong Kong and Singapore where real estate prices are amongst the highest in the world. In Hong Kong, for example, housing prices have almost doubled since 2010, according to the Euromonitor International’s House Price Index.
There is also growing potential for co-living amongst the elderly, since it offers the social interaction, environmental sustainability and accessible design required for this demographic. The challenge in widespread adoption for this target group is the perceived image of shared accommodation, with many older people preferring to maintain their independence. However, given that many Baby Boomers were so in favour of communal living in their own youth, co-living is not unfamiliar.
Businesses have started aggressively pursuing co-living opportunities to be ready for disruption in the medium term. Campus Hong Kong operates a large co-living facility in the city-state, having converted almost 50 one-bedroom apartments into four-bed dormitory rooms. In Singapore, Ascott, a hotel chain owned by one of Asia’s largest real estate companies, CapitaLand, unveiled the lyf brand in 2016, which is a focused co-living project in partnership with Singapore Management University. The project is expected to expand to China, which has become a major co-living hub in its own right. The You+ International Youth Community already offers rooms to young people in Guangzhou and Beijing.
For older consumers, a number of co-living villages have sprung up. One example is Ashby Ponds in the US, which is a retirement community focused on creating a social cohabiting space for Baby Boomers. The residence offers apartments and houses, and many amenities on-site. The aim for these type of communities is to avoid an institutional image, and instead, sell the idea of fun aging. There is growing demand for this type of co-living for older generations globally. In Europe, these communities are well-established in the Netherlands, and in London, Older Women’s Co-Housing (OWCH) completed its co-housing community for women over the age of 60 in 2017. 20% of US-based start-up Ollie’s co-living spaces are rented by consumers aged 50 years and over.
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