Where Is Co-Living Investment Growing in Australia in 2026?

Where Is Co-Living Investment Growing in Australia in 2026?

Answering: Where is co-living investment growing in Australia in 2026, beyond Melbourne?

Estimated reading time: 8 min read

Co-living demand is growing across multiple Australian cities in 2026, not just Melbourne. The tightest rental markets in early 2026 include Adelaide at around 0.6 per cent vacancy, Perth near 0.8 per cent and Brisbane around 1.0 per cent, alongside Melbourne, and The Harmony Group builds across these markets rather than in any single city. Where co-living makes sense in each place depends on local vacancy, genuine demand and build timelines, which vary by state. So the honest answer is that this is a national opportunity shaped by local conditions, not a Melbourne-only story. This is general information rather than personal advice, and any location decision should be made on its own merits with proper advice.

If you have assumed co-living is really just a Melbourne strategy, that is a common impression worth correcting. The rental shortage driving it is national, and several other cities are among the tightest markets in the country right now.

The reality is that every city has its own dynamics, so growth in one does not automatically mean growth in another. Vacancy rates, population and jobs growth, planning rules and build times all differ, and they determine whether co-living stacks up in a given market. Success comes from reading each city on its own terms rather than assuming a national trend applies everywhere equally.

This guide explains why co-living demand is national, where the growth markets are in 2026, and what makes a particular city work for co-living.

Key Insights

  • Co-living demand is national, driven by a structural rental shortage. In early 2026 the tightest markets include Adelaide near 0.6 per cent vacancy, Perth around 0.8 per cent and Brisbane about 1.0 per cent, alongside Melbourne.
  • The Harmony Group builds across multiple markets, including Melbourne, Adelaide, Perth and Brisbane and beyond, rather than being limited to any single city.
  • Build timelines differ by market, with Melbourne and Adelaide typically around six months and Perth around ten to twelve months, which affects when a project delivers.

Keep reading for the complete guide.

Table of Contents

Why Co-Living Demand Is National, Not Local

The force behind co-living is a national rental shortage, not a local quirk. Australia’s vacancy rate has sat near 1.0 per cent in early 2026, well below the roughly 2.5 per cent that signals a balanced market, and analysts describe it as sustained structural undersupply rather than a passing squeeze. When affordable housing is scarce across the country, demand for well-located, affordable rooms follows in many cities at once.

Affordability pressure is similarly widespread. Rents have risen around 5.7 per cent annually across the combined capitals, which pushes renters toward more affordable options wherever they live. That is why co-living is not confined to one market: the underlying need it meets exists nationally, even though the intensity varies from city to city.

This is worth stating plainly, because co-living is sometimes described as a Melbourne phenomenon. In practice, some of the tightest rental markets in the country are elsewhere, and the opportunity reflects that. Our demand-focused piece on whether co-living is oversupplied looks at the demand data in more detail.

The Growth Markets in 2026

Adelaide has been among the tightest markets in the country, with vacancy around 0.6 per cent in early 2026, and build timelines there are typically around six months, which can make it an efficient market to deliver in. Perth has also been very tight, near 0.8 per cent, though build timelines there run longer at roughly ten to twelve months, so the delivery horizon is a genuine planning factor.

Brisbane and wider Queensland sit around 1.0 per cent vacancy and continue to attract population and investment interest, and The Harmony Group builds there too, contrary to the occasional impression that it avoids the market. Melbourne remains a core market with a deep base of demand, even as its vacancy, near 1.4 per cent, is a little softer than the tightest capitals. The point is that these are complementary markets, each with its own timing and dynamics, rather than a single location with everywhere else as an afterthought.

Across all of them, the same discipline applies. The Harmony Group runs each opportunity through a 118-point analysis framework and declines roughly 85 per cent of the sites it assesses, and across the team’s delivered projects the historical average gross yield has been 10.8 per cent, with occupancy above 98 per cent. Those are historical results, not guarantees, and each market is assessed on its own merits.

  • Compare local vacancy and demand, not just the national headline.
  • Factor in build timelines, which differ markedly between cities.
  • Treat each city as its own decision rather than assuming a national trend.

What Makes a City Work for Co-Living

A city works for co-living when several things line up. There needs to be genuine rental demand, usually signalled by low vacancy and rising rents. There needs to be a population of renters the model suits, such as workers, students and professionals seeking affordable, well-located accommodation. And the planning and certification environment needs to allow purpose-built, Class 1B co-living to be delivered within a workable timeframe.

Those conditions exist in more than one Australian city right now, which is why the opportunity is genuinely national. But they exist to different degrees and with different timelines, so the right approach is to assess each market rather than assume co-living works everywhere or nowhere. If a particular market or site is not right, an honest assessment will say so.

Local rules matter as much as local demand. Planning frameworks, council requirements and the path to Class 1B certification differ between states and even between councils, which affects both what can be built and how long it takes. A market with strong rental demand but a slow or restrictive approval environment behaves very differently to one where purpose-built co-living is straightforward to deliver. This is why a genuinely national strategy still comes down to a site-by-site, council-by-council assessment rather than a blanket view of any one city.

Co-living investment is growing in multiple Australian cities in 2026, including Adelaide, Perth and Brisbane as well as Melbourne, because the rental shortage driving it is national. The Harmony Group builds across these markets, with a 118-point assessment applied in each and a historical average yield of 10.8 per cent the team reports across more than 200 projects. Judge each city on its local vacancy, demand and build timeline rather than on a single-market assumption.

For a deeper look, visit The Harmony Group to explore how we approach purpose-built co-living.

Frequently Asked Questions

Q: Where is co-living investment growing in Australia in 2026?

A: Across multiple cities, driven by a national rental shortage. Some of the tightest markets in early 2026 include Adelaide near 0.6 per cent vacancy, Perth around 0.8 per cent and Brisbane about 1.0 per cent, alongside Melbourne. Each market has its own demand and build timelines, so co-living is a national opportunity shaped by local conditions.

Q: Is co-living only a Melbourne strategy?

A: No. While Melbourne is a core market, the rental shortage behind co-living is national, and several other capitals have tighter vacancy. The Harmony Group builds across Melbourne, Adelaide, Perth and Brisbane and beyond, rather than being limited to one city.

Q: How long does a co-living project take to build?

A: It varies by market. Build timelines are typically around six months in Melbourne and Adelaide and around ten to twelve months in Perth, so the delivery horizon is an important planning factor when choosing a market.

Q: How do I choose the right market?

A: Look at local vacancy and rental demand, the renter population, and build timelines, and assess each city on its own merits. For general information, book a free, no-obligation strategy session, and if a market or co-living itself is not suitable, you will be told why.

Want to Learn More?

The Harmony Group’s team brings 15 years of specialist experience and a track record across more than 200 delivered co-living projects in multiple markets. The approach is educators-first: each city assessed on its own conditions, with honest guidance on where co-living does and does not fit.

Citations

  • “SQM Research national vacancy, March 2026”: Records a national rental vacancy rate of 1.0 per cent with city figures including Adelaide at 0.6 per cent, Perth at 0.8 per cent, Brisbane at 1.0 per cent and Melbourne at 1.4 per cent, well below the roughly 2.5 per cent balanced level. propertyinvestmentprofessionals.com.au
  • “Cotality (CoreLogic) Housing Chart Pack, May 2026”: Reports annual rent growth of 5.7 per cent across the combined capitals and a national vacancy rate well below the decade average, reflecting sustained demand pressure nationally. propertyinvestmentprofessionals.com.au

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General information only. The Harmony Group provides general information about property and co-living investment, not personal financial, tax or legal advice, and does not hold an Australian Financial Services Licence (AFSL). It does not account for your objectives, financial situation or needs, so consider its appropriateness and seek advice from a licensed financial adviser, accountant or the ATO before acting. Past performance is not a guide to future results and historical figures may not be repeated.

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