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

The Harmony Group builds nine-bed co-living property in Melbourne, across the middle ring, Frankston and a smaller area around Geelong, where a nine-bed property needs no special planning approval. Our investors come from every state in Australia, and the whole process can be run remotely. The market comparison below is for readers weighing where rental demand is tightest, not a list of places we build.

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 rental shortage behind that demand is national even though The Harmony Group’s own projects are built in Melbourne. 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 the opportunity co-living responds to is shaped by local conditions in every state, even though our build footprint stays in Melbourne. 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 nine-bed co-living in Melbourne, where it can be delivered without special planning approval; investors join from every state in Australia.
• 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 Growth Markets in 2026
• What Makes a City Work for Co-Living

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 local build timelines there run around six months. Perth has also been very tight, near 0.8 per cent, with local build timelines running longer at roughly ten to twelve months.

Brisbane and wider Queensland sit around 1.0 per cent vacancy and continue to attract population and investment interest. Melbourne remains our core market, and the one we build in, with a deep base of demand and no special planning approval required for a nine-bed property, even as its vacancy, near 1.4 per cent, is a little softer than the tightest capitals. Each of these markets has its own timing and dynamics, and the comparison here is for the reader weighing where the rental shortage is tightest, not a list of where we build.

In Melbourne, the same discipline applies to every opportunity. The Harmony Group runs each site 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.

• 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 nine-bed co-living in Melbourne, with a 118-point assessment applied to every site and a historical average yield of 10.8 per cent the team reports across more than 200 projects, and welcomes investors from every state. Judge each city on its local vacancy, demand and build timeline if you are comparing markets generally.

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: The Harmony Group builds nine-bed co-living in Melbourne, where it can be delivered without special planning approval. The rental shortage behind co-living demand is national, and several other capitals have tighter vacancy than Melbourne, but our own projects are Melbourne-built and our investors come from every state in Australia.

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

A: A Harmony Group co-living project in Melbourne typically takes around six months to build. Timelines in other states vary, from around six months in some markets to ten to twelve months in others, which is a useful factor if you are comparing markets generally.

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 team experience spanning 200+ high-yield and specialist accommodation projects. The approach is educators-first: each city’s rental market 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

Related Reading

• Is co-living oversupplied? What the demand data shows
• How much rental income can co-living realistically generate?
• Is co-living a recession-resilient property investment?
• Co-living vs other high-yield property strategies
• Purpose-built co-living vs a rooming house

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.