The housing market is in a tight spot. In major cities around the world, the cost of operating a building is going up, while the salaries of young professionals are not keeping pace. This creates a difficult situation for the real estate industry. There is a huge demand for high-quality housing that offers a great lifestyle, yet the people who want this housing have less money to spend. This raises a big question. Can we actually offer luxury at an affordable price? At the Coliving Conference 2025 in Barcelona, Spain, industry experts came together to show that the industry needs to stop looking at cost and quality as opposites, and start thinking differently about value, efficiency, and what tenants really want.

The Efficiency of Experience: Can Coliving Truly Democratise Luxury?

In the United Kingdom, the discussion around affordability is complicated, sitting uncomfortably within the rigid frameworks of urban planning and investment valuation. Jo Winchester, Coliving Consultant with a background in charter surveying and valuation, pointed out that the word itself can be tricky. There is a difference between “formal” affordability, which refers to social housing and government targets, and “general" affordability, which just means good value for money. It all boils down to: Can a median earner actually pay the rent?

The reality for young renters is tough. Winchester noted that the median full-time salary in London was approximately £47,500 in 2024, with that figure dropping to £37,600 across the rest of England. While the government says rent should not take up more than 30% of a person's income, the reality is that London renters often pay between 35%-45% just to have a place to live.

Winchester notes that for coliving to claim affordability, it must find the “sweet spot” between two existing competitors - it must be cheaper than a private one-bedroom flat, but offer a higher quality of life than a room in a shared house. For example, if a coliving studio costs £1,650 per month compared to a £2,100 private flat, the value proposition holds - even if it’s more expensive than a £950 shared room. This data is vital for developers who need to show that despite the rent seeming high for the size of the room, the total monthly cost is actually a good deal compared to the alternative. The "luxury" element is then not absolute opulence, but providing a private, serviced environment that would otherwise require a salary of £70,000 to obtain in the traditional rental market. 

Redefining Luxury: The Hardware and the Software

For Ferran Tramuns Llopart, Marketing & Sales Manager at La Fabrica &Co in Barcelona, Spain, the value proposition is twofold - "hardware" and "software". Hardware refers to the building itself - natural light, open communal kitchens, terraces, and private rooms that change to fit your needs. But the true luxury in coliving is about making life easy for people, and the “software” is where the real value is added.

The most significant shift in the coliving business model is the transition from rent collection to service provision. The modern tenant is not just paying for a room, they are paying to outsource the administrative burdens of adult life. For someone moving to Barcelona, luxury is not worrying about setting up Wi-Fi or electricity bills. Llopart emphasised that services like 24-hour reception, parcel collection, and help with visa paperwork are a form of luxury that normal landlords simply do not offer. By bundling these services into the rent, operators remove the "risk premium" international movers usually pay - the fear of scams, the cost of temporary accommodation, and the time lost to administration. It is a shift from material wealth to time wealth - when a resident can arrive in a new country and have their life set up within an hour, they see the value immediately. 

This service-heavy approach requires a fundamental restructuring of how property is managed. Sunny Lou, Senior Property & Relations Manager at Studio Homes Victoria in Melbourne, Australia, argues that the only way to make this level of service affordable is through vertical integration. In the Australian market, the standard model involves a developer building a property and handing it to a third-party real estate agency, who charges leasing and management fees, and views tenants as numbers. By bringing construction, interior design, and property management entirely in-house, operators can slash the operational overheads that usually inflates rent.

The impact of this efficiency is quantifiable. In Melbourne, where competitors charge $700 per week for a studio, vertically integrated operators like Studio Homes Victoria can offer a superior service product for $400 per week. The "luxury" here is the seamlessness of the experience - utilities are connected before arrival, maintenance is handled directly by the owner-operator, and the middleman is eliminated. This suggests that the future of affordable coliving lies in cutting out the inefficiencies of the traditional real estate supply chain, while maintaining a personal touch to cater to the specific needs of coliving residents. 

Using Design Mechanics to Create Spatial Value

When price sensitivity limits the physical footprint of a unit, design mechanics must compensate for the lack of space. A 27m² studio can feel either claustrophobic or like a high-end micro-apartment depending entirely on how the space is manipulated. Lou highlights the necessity of retractable furniture systems. with beds that fold into walls, built-in cupboards, and desks that collapse to allow a single space to transition from bedroom to office to dining room throughout the day. This effectively doubles the usable space, allowing residents to have friends over or work from home without feeling stuck in a bedroom.

This is where the "luxury" narrative faces its most difficult test. To convince a resident that a compact studio is a "home" rather than just a "room," the interior design must work harder than in a traditional apartment. It is about the intelligent application of volume. High ceilings, floor-to-ceiling windows, and private outdoor spaces are used to create a psychological sense of expansion that defies the floor plan.

Furthermore, the integration of communal spaces functions not just as a social amenity, but also as a spatial subsidy. By moving functions like dining, exercising, and working into shared areas, the private unit is relieved of the pressure to be everything at once. However, Winchester pointed out that the success of this model depends on its execution. A gym in the basement is an amenity, whereas a coworking lounge that facilitates actual collaboration is a lifestyle product. The distinction is crucial for planning authorities who need to see that these communal spaces are genuinely usable extensions of the living area, rather than token additions to justify density.

Vertical Integration Drives Cost Efficiency

The reality for coliving operators is that development costs are rising, while tenant purchasing power is stagnating, and the only relief from this economic pressure is operational efficiency. The traditional real estate model, fragmented across landlords, agents, and maintenance contractors, leaks value at every interval. Studio Homes Victoria demonstrates that "five-star service" is only financially viable if the operator controls the entire value chain.

This control allows for strategic decisions that third-party agents would never make. For instance, creating a distributed network of properties across a city rather than a single central behemoth allows operators to offer different price points while maintaining brand consistency. It also allows for a more forgiving approach to retention. If a resident's circumstances change, they can move between properties within the same portfolio without breaking a lease or incurring new fees. This offers a level of flexibility that traditional landlords cannot match.

Moreover, the in-house model fosters a direct feedback loop. When the construction team "sits in the same office" as the property manager, design flaws identified by residents can be rectified in the next development cycle. This iterative improvement is impossible when the feedback gets lost in the chain between a tenant, a property manager, an asset manager, and a remote institutional owner.

Why Community Keeps People Staying

Ultimately, the metric that defines the success of "affordable luxury" is retention. Do residents renew their contracts once they have settled in? The evidence shows that the community is a stronger reason to stay than the price alone. When residents are asked, they often say they came for the price, but they stayed for the friends they made.

There is often a worry that this community feeling gets lost in big buildings. People may question whether it is possible to really have a “'vibe” in a building with over 400 units. The answer lies in how the space is run. Large buildings work like resorts - not everyone is in the lounge at the same time. Investing in the right team and booking systems, even huge buildings can feel friendly.

Data from Studio Homes Victories supports this, with annual surveys showing that 80% of residents in smart studios feel they are living in a "small apartment" rather than just a "rental room." More importantly, renewal rates are approximately 80% as well. Some residents even stay for up to five years. Even when rents increase, residents tend to accept it, because the alternative is navigating a lonely and complicated private rental market. Llopart notes that "ambassadors" - residents who extend their stay or return to the property for events after moving out - are the most effective marketing tool available. The community itself becomes the amenity that justifies the rent.

However, challenges remain regarding demographics. As an audience member pointed out during the conference, there is a risk that "affordable luxury" becomes a euphemism for "luxury for rich students". If the price point, even when "affordable" by comparison, still excludes the local workforce, the sector risks becoming an enclave for international elites. True success will come when these operational efficiencies can deliver a product that is accessible to the local teacher, nurse, or creative professional, not just the wealthy expat.

The Future of Value in Shared Living

The coliving sector has  matured from a novel asset class into a sophisticated solution for the urban housing crisis. Having moved past the early testing phase into a time where being smart with money and operations is essential, the insights from Coliving Conference 2025 show that “affordable luxury” is not just a slogan, but a necessary strategy to thrive in a world where everything is getting more expensive. It requires us to rethink what a home provides - it is no longer enough to just rent out space, operators must rent out a solution to the problems of modern city life.

For developers and investors, the way forward involves three clear steps. First, they should attempt to control the whole process. The best prices come from owning the project from start to finish, which protects the business from outside costs. Second, they need to communicate luxury as a service, not just a physical object. Showing planning officials that a project offers safety and community at a fair price is key to getting approval. Finally, the design must be flexible. Furniture that moves. and spaces that change allow for affordable density without making people feel suffocated. By redefining luxury as the seamless integration of life, work, and community, coliving has the potential to offer something the traditional housing market has failed to provide - a living experience that respects the tenant's time as much as their money.