Co-living Becomes Popular Among Millennials in China

Yoursz.com Wed, 28 Feb 2018 16:44:35 GMT

As home prices continue to be out of reach for many millennial Chinese real estate buyers, the modern concept of co-living has started to catch on, especially in some of the bigger cities.


Co-living is a type of communal housing that is similar to a dormitory – each person typically gets their own private room with various amenities along with the use of shared spaces such as living rooms, dining areas, entertainment areas, fitness rooms, and kitchens.


Typically, residents get one low and manageable monthly bill, which is easier to manage for busy young professionals. They also get to enjoy a far more connected and vibrant community life with ongoing networking events, activities, talks, and entertainment options compared to apartment buildings.


The trend is part of a general shift toward an urban lifestyle that focuses on community and sharing, with co-working, ride sharing, and car sharing being similar recent trends.


Although co-living is a form of rental housing, it is often far more affordable than renting an individual apartment, condo, or sharing one with roommates, especially in China’s biggest cities and several other Asian countries.


Although prices for co-living spaces can vary substantially depending on included amenities, they are often seen as being more affordable than comparable studio flats.


Demand from millennials has been high


The demand from millennials has been high. With 43 million new graduates in China over the past 5 years and extremely high housing prices in Tier 1 and 2 cities, co-living has become a preferred choice while young graduates save money toward their first home purchase [1].


The same trend can be seen in other countries where the cost of living remains among the highest in the world such as Singapore and Hong Kong.


In China, one of the first co-living spaces was YOU+, which first emerged in 2012. At the end of 2016 there were a total of almost 90 co-living operators throughout the country, including YOU+ which had expanded to 16 properties, ZiRoom with seven properties, and Mofang with 10,000 units.


YOU+ currently operates 25 branches with accommodations for over 10,000 people in cities like Guangzhou and Chongqing. Co-living structures can be found throughout Beijing where some of the country’s top educational institutions and employers are located including Peking and Tsinghua Universities and the Zhongguancun tech hub.


Co-living appeals to millennials


Co-living remains an appealing option to young people because most of the spaces are brand-new with modern luxury building amenities that would otherwise cost them significantly more if they were to rent an apartment.


They are able to enjoy an upscale lifestyle at the cost of a little privacy, which many welcome for the social aspect and sense of an organized community that is often lost when young adults transition from college to the job market.


Throughout Asia, rising rents have driven millennials and other demographics abroad looking for more attainable property investments. Co-living is anticipated to continue to grow to meet their needs domestically.


An attractive option for investors


Co-living investment has also been an attractive option for Chinese real estate buyers and other investors throughout Asia who have converted small budget hotels and multifamily structures into what can be highly profitable co-living startups.


There has been an increasing number of real estate owners in Hong Kong who have converted their hotel, residential or guesthouse properties into co-living spaces since 2015 [2]. However, the process of converting a building into a co-living community can be long and complicated.


In Singapore, a new startup called Hmlet recently raised funding of US $1.5 million to build co-living spaces [3]. The founder, Yoan Kamalski, is confident that Singapore residents will embrace the startup.


It seems to be a safe bet, as Chinese millennials have long proven the high demand for similar co-living spaces already.



References


[1]  https://www.propertyguru.com.sg/property-management-news/2018/1/168180/co-living-gains-traction-in-asia
[2]  http://www.worldpropertyjournal.com/real-estate-news/hong-kong/jll-report-bridging-the-housing-gap-millennials-coliving-in-asia-report-millennials-housing-trends-in-asia-china-housing-report-2018-china-real-estate-news-10737.php
[3]  https://www.jllrealviews.com/industries/co-living-fills-a-need-in-hong-kong/