Co-living: what, why and who?LIVING
Within the rapidly growing ‘sharing economy’, alongside car-sharing, communal vegetable-growing etc., co-living is becoming an increasingly important factor. But while the general principles may seem obvious, for real estate professionals a more in-depth analysis of the trend is necessary. Real estate advisor Cushman & Wakefield has carried out such survey, and is able to explain exactly what co-living is, and who it is for.
Cushman & Wakefield starts by saying that co-living is a rising trend amongst the real estate industry with multiple investors, operators and occupiers showing genuine interest in this particular type of living. Co-living is a way of living where people live together in a kind of community. It is characterized by tenants having their own personal room with often their private bathroom and living in shared spaces. These spaces consist of shared living and working spaces.
Purpose Built Student Accommodation and Multi-Family housing also have both the private living space with the communal areas but co-living itself differs by sharing amenities, and having ‘like-minded’ residents in the same building. In general, co-living differentiates itself by providing multiple amenities for its tenants, or co-livers. The houses are fully furnished (furniture and kitchen essentials), there is a cleaning service and Wi-Fi is provided. Depending on the providers, additional streaming services, work spaces and community services can be present. The professional parties active in co-living can vary from being just an operator, or property manager to being an investor or real estate developer of properties themselves.
Multiple operators conclude that co-living is suited to young adults who have left the family home and are ready to pursue a life in the city centre. For co-living, the tenants who show the most interest are typically between 18 and 35 years old. According to multiple operators, people aged between 25-35 years are particularly suited to co-living. This targeted demographic group follows the trend of the overall Belgian population, namely ageing. Since 2015, the demographic group has been declining at less than 1% per year. Nevertheless, since 2019, the decline has slowed down and is set to increase for the next couple of years. Within overall Belgian demographics, the Flemish population continues to have the highest share of 25-35 years old, with Wallonia in second place and followed by Brussels.
Alongside the evolution of the young population, light can be shed on the kinds of households and expected evolution. The most common household in Belgium is the single-person household and this segment is even expected to increase towards approximately two million by 2030. Married couples with or without children are the second most common household type in Belgium. Couples with children are expected to decrease slowly and become slightly surpassed by married couples with no children. Unmarried couples with or without children are projected to increase as well but remain on more or less at the same level. For co-living, the single-person households are an important factor to continue to observe. And as previously mentioned, co-living is mostly for single-tenants and is thus ideally suited to single-person households.
One final factor to take into consideration is the housing cost overburden. This represents the percentage of households where the housing costs exceed more than 40% of disposable income. Since the last decade, at least 25% of single-person households has had to spent more than 40% of their disposable income on housing costs. The housing costs for co-living are typically 20% to 30% less than those of alternative living arrangements, which is advantageous to both investors wishing to provide co-living and tenants looking for housing.