Co-living: Win-win for young professionals and investors
Many young professionals in Hong Kong aren’t necessarily graduating from student-style living once they enter the workforce.
With the private house market heating up again so far in 2019 and Hong Kong Chief Executive Carrie Lam signalling concerns about affordability of housing, thousands of millennials in the city who aren’t eligible for public rental housing have to grapple with the prospect of living at home or paying up to 80% of monthly salary in rent.
Many are now opting for co-living schemes, a form of shared housing which typically consists of separate rooms with private bathrooms and communal facilities such as kitchens, living areas and laundries.
The number of such facilities in Hong Kong has almost tripled since 2017, according to JLL data. Recent co-living developments include Synbox in Hung Hom and Weave on Boundary in Prince Edward, where a single room costs HKD2,800 to 9,500 a month.
Co-living schemes that can provide a genuine discount in rents compared with those in the traditional private housing market will be able to attract tenants.
Cost, however, isn’t necessarily the only consideration for tenants. “Co-living developments are becoming more of a lifestyle choice. They are particularly appealing to expatriates who seek a community to meet people in a new city without the need to commit to a long-term lease. This means operators and investors will have greater flexibility to increase rents,” says Cathie Chung, senior director for research at JLL Hong Kong.
The added demand from students who are unable to secure residence on campus and local young professionals seeking to live independently at a price they can afford provide solid fundamentals for investors looking to diversify their portfolios. It’s certainly a win-win for both tenants and landlords.
Read our ‘Alternative Investments in Hong Kong: A Shift Towards Diversification’ report for more on other alternative asset classes in Hong Kong and potential investment opportunities.