Future Trends in Residential Developments

In the next 20 years, several demographic changes will shape the future housing demand in Australia. One of the factors forcing the difference is the general aging of our population; specifically, the Baby Boomers (1946 and 1964) entering retirement. Although there will be a slowdown in overall population growth, relative to current numbers, the proportion of people aged 65 or older will grow dramatically. This increase will account for about two-thirds of net population in the coming decade. 

Following the Baby Boomers, Generation X: (1965 and 1978), are a critical demographic for the future health of the housing market. However, the biggest concern is over future housing market conditions when Generation Y (1980 – 2000) or the Millennial generation enter the housing market. The increasing cost and market values in Australian’s major cities have made housing unaffordable and out of their reach. This has had the greatest effect on Generation Y in terms of delays in forming independent households, getting married or forming partnerships and having children.  

Setting generational patterns aside, the housing affordability factor will drive the way future housing will be designed and constructed in Australia. In addition to design, planning and construction methodologies, there will be a shift in the way housing will be delivered in the form of cooperative and co-housing models linked with intergenerational living where communities can thrive. Furthermore, with the introduction the National Disability Insurance Scheme (NDIS) promoted by the Federal Government, the tenure and financial structures will shift if these programs are included as part of the housing mix.   

Design and planning trends

With the generational and demographic changes together with the current housing affordability problem in Australia, there are already signs of new design and planning trends starting to emerge. Some of these trends are already in place and will continue to develop while others are still in the early stages of adoption. 

  • Infill developments – Over the last two decades, planning authorities have been promoting urban infill in older suburbs to discourage a suburban sprawl affecting most Australian Capital cities. While there has been community backlash for higher density projects, there is nothing that will stop these developments. Building in established locations that are more accessible to jobs, public transportation options, and commercial activities has increased as many younger households show little interest in traditional housing subdivisions in remote locations on the suburban fringe.  
  • Smaller, better-designed homes – With increasing land prices and cost of construction, homes will be a lot smaller in floor area; therefore architects and interior designers must find more innovative design ideas to make these homes more liveable. With smaller spaces, rooms will need to become more flexible with the ability to quickly transform into a new space without a complete makeover or costly renovation. The trend should continue to grow as smaller households start looking for developments in desirable locations with innovative design features.  
  • Universal design and accessibility – Over the last 18 years, universal design which is a series of design principles that encourage accessible environments, has been widely accepted in the architectural industry. Over the next 10 years, the majority of Baby Boomers will have turned 65, and with the Federal Governments’ National Disability Insurance Scheme (NDIS), the provision for disability access will be further adopted in all building design aspects. 
  • Ecologically sustainable design – For some years now there has been an increasing interest in sustainability and the use of renewable materials for the design of new buildings. Many homeowners are looking to the future and installing technology to create sustainable environments. Sustainability has been a growing trend for the last ten years, and it shows no signs of going away. One of the biggest design trends today is a shift away from overconsumption of energy, carbon emissions, and excess waste creation. Studies show that innovative architectural designers can reduce a home’s heating cost and ecological footprint. 
  • Health conscious design – The growing concern over environmental health issues is also focused on residential buildings. Using sustainable design and green construction methods, homes can effectively eliminate harmful fumes and chemicals. Green building materials are also on the rise, with recycled and biodegradable materials. Indoor air quality can be improved by ensuring that designs consider the importance of natural and cross ventilation in the early design stages.  
  • Kitchens take centre stage – Kitchens have evolved into the family centre of most homes and have become more prominent. The dining room has begun to fade as seating space is now being included as part of the kitchen. Kitchens provide a central hub for a family to gather together in one appealing space. 
  • Rooftop gardens – With higher density residential developments there is an increasing interest to utilise some or most of the roof level as a resident community outdoor area for entertaining visitors or growing vegetables. These features are expensive and are feasible only if there is a critical mass of residents or in up-market developments.  

In addition to the above, other factors will have a major influence on how homes are designed over the next decade. Government new standards in design and regulatory issues, new technological breakthroughs, and consumer preferences for new housing features and materials will further influence home design.  

Smart building technology

In Australia, the demand for affordable housing has caused developers, architects, builders, engineers etc. to seek new building materials and construction methods. With the need to save costs, these developers together with their professional development team have come up with some interesting housing innovation construction methods in recent years. 

OSM (Off-Site Manufacture) 

One of the key focus areas of innovative construction methods is OSM (off-site manufacture), where parts of or whole buildings are manufactured in a factory away from the actual construction site. These Individual parts or modules are then transported to the site on specialised trucks and trailers.  

The off-site construction process reduces project construction time as the buildings are manufactured concurrently with site preparation. In addition, the amount of site disruption is decreased as less work is performed on site. As most of the work is performed in the factory, manufacturing efficiencies can be gained, and materials purchased in larger quantities. Due to higher accuracies that can be achieved in the factory-based manufacturing process, higher sustainability levels can be achieved.  The types of products that can be manufactured in OSM process include

Prefabricated Building Components Prefabricated Building Components
Pre-fabrication started over 100 years ago and gained popularity in the 20th century. The most widely used form of prefabrication in buildings is the use of prefabricated concrete and prefabricated steel sections in structures where a part or form is repeated many times. Prefabricating steel sections reduces on-site cutting and welding costs as well as the associated hazards. Prefabrication techniques are used in office blocks, warehouses and factory buildings.
Transportable buildings Transportable buildings
Transportable buildings or homes have been around in Australia for some time. These buildings are built in a factory and then transported onto sites mainly in regional areas where skilled trades are not available. The homes are like standard suburban homes expect they are built in sections of width and length so that they be transported by conventional trucks to the site.
Flat-Pack Construction Flat-Pack Construction
Flat-pack buildings are factory produced building components broken down into smaller elements and package together, delivered to site and assembled by the various skilled and unskilled tradesmen. In simple terms, it can also be described as the IKEA format of building. Although the lightweight steel frame and main components are standardised, the designs are not. This allows buyers the ability to design their building.
Volumetric Modular Buildings Volumetric Modular Buildings
Volumetric modular buildings are similar in concept to Transportable Homes except they are mass produced modular units designed for apartments, hotels or mining camps where there is a repetition of the same module. It is essential to make the production of the cost of the module effective, and there should be a critical mass of a similar product. The modular units may form complete rooms or parts of rooms which are six-sided boxes constructed in a factory, then delivered to site.
Bathroom and Kitchen Pods Bathroom and Kitchen Pods
The concept behind the prefabricated bathroom pod has evolved over the years and has led to the prefabricated kitchen pod as well. The pod is like the volumetric module except that they only house the bathroom or kitchen unit. As with any residential development, the most expensive part of a building is the kitchen and bathroom areas compared to other areas of a house or apartment.

Benefits in OSM in property developments

OSM construction is fast becoming the world’s preferred building technique that has been proven over 30 years and is continuously evolving. The benefits of using OSM in development are:

  • Speed of Construction – This means a quicker return on Investment. OSM construction allows for the building and site works to be completed simultaneously thereby reducing the overall completion schedule by as much as 50%.
  • Indoor factory construction – Assembly is independent of weather which increases work efficiency and avoids damaged building material. Time spent in bad weather or hazardous environments at the construction site is minimized.
  • Favourable pricing – With multiple similar components, manufacturers can effectively bargain with suppliers for discounts on materials. Quicker construction times and reduced reliance on site based skilled labour contributes to additional cost savings.
  • Improved Quality – Building modules are finished in a factory environment which ensures improved quality control. Efficiencies in production and reliability are also achieved through fewer defects or call-back.
  • Service remote locations – In Australia, there are higher costs to build in a remote area or an area experiencing a construction boom such as mining towns. OSM buildings can be built in towns and transported to regional areas.
  • Minimum wastage – With the same plans being repeated, records of the exact quantity of materials can be established. With on-site buildings, there is a large quantity of waste required to move, whereas OSM buildings generate less waste and cleaner sites.
  • Environmentally friendly construction – OSM construction generates less materials waste, use less energy and generates less site disturbances than comparable site-built structures, therefore, making it an environmentally friendly process.
  • Safety – As there are fewer components involved compared to traditional construction methods, OSM construction has been proven to be a safer method of construction.
  • Self-supporting – As most building components are ready-made components, the need for formwork, shuttering and scaffolding are significantly reduced.

Risks with OSM in property development

While there are many advantages in using OSM construction, developers should also be aware of the risks involved with using anything new in their projects.

  • New to the market – OSM buildings have not been particularly marketable when compared to standard on-site buildings.
  • Market perception – The consumer is either not familiar with the concept or does not desire it. Social stigmas such as inferior quality exist because of low-quality mass-produced designs used in the past.
  • Compliance – Majority of prefab and modular buildings come from Asia and do not comply with the BCA (Building Codes of Australia).
  • Financing – Difficulties are obtaining finance due to stricter guidelines being used by lenders to assess prefab & modular building loans.

Most of the risk mentioned above relates to the market’s reaction. However, if there is a cost saving, then developers should lower their prices to reflect this as it will give them a competitive edge over their competitors.

Other building technologies

In addition to OSM, several systems are coming into the market such as lightweight concrete bricks and panels and lightweight steel frame structures that are easily assembled. One of the more recent innovations is 3D printed buildings. 3D printing, also called additive manufacturing involves creating a solid object by layering thin slices of material including plastic, metal and ceramic. The technology has been in industrial use for at least 20 years. 

More recently with the drive towards sustainability, timber buildings have come back in vogue as timber is widely recognized as a carbon-neutral building material. Another sustainable material that is making great strides in the construction industry is hempcrete. Hempcrete is a mixture of hemp hurds (shives) and lime.

3D Printed Buildings 3D Printed Buildings
Printed buildings refer to technology that use 3D printing to construct buildings. The advantages of this would be quicker construction, lower labour costs and less waste produced. 3D printing has recently emerged as tech’s topic with the greatest expectations. Technically, 3D printing, or additive manufacturing, refers to the process of creating almost any three-dimensional object with various materials such as plastic, metal, or carbon fibre.
Tall Timber Construction Tall Timber Construction
By 2050 the global population will add another 2.5 Billion people to its cities. This pace of growth is not sustainable, so it is essential that we find another solution to steel and concrete structures. The answer is to look at timber construction which is renewable and with the advancement of cross-laminated timber it allows these structures to go as high as 30 storeys or more.
Hempcrete Construction Hempcrete Construction
Hempcrete is a biocomposite building material, made up of a mixture of hemp hurds (shives) and lime. The result is a lightweight insulating material ideal for most climates as it combines insulation and thermal mass. Hempcrete has been used in France since the early 1990s to construct non-weight bearing insulating infill walls. With the restriction removed in growing hemp in Australia, there is increasing interest in hempcrete construction. It won’t be too long where we see hempcrete being used in 3D printed buildings

Intergenerational Living

From a social level, another trend that will start becoming more noticeable will be Intergenerational Living. Intergenerational Living is the establishment of a community with traditional family values. This type of community has been established since the start of humankind. It is where younger and older people live together harmoniously according to the traditional concept of respect.

As society has become more self-sufficient, boundaries have been created, and family members have been segregated. For example, we create retirement villages and new sprawling suburban areas for younger families, separating grandparents from their grandchildren and not allowing daily interaction.

The concept began in Europe about three decades ago with people aged in their 50s and 60s wishing to explore new living options. They wanted to find a ‘third way’ that avoided the disadvantages of either living alone in independent units or living exclusively among other older people in a retirement village. They saw that traditional support institutions such as the family, neighbourhood, community and church had weakened and felt the need for new solutions that would foster connections and a sense of belonging.

In an IGC complex, people of different ages live together in apartment blocks or separate houses. Units may be rented or privately owned, with separate titles. Each individual or family have their own self-contained space complemented by communal facilities and gardens. Depending on the community’s needs, the communal spaces can be used for meetings, shared meals and for workshops or hobbies. In larger complexes, there might be a café which is open to the public, a laundry, a child-care centre, areas for youth activities, special care apartments with professional care, and guest rooms for visitors.

Generally, the average complex will have 30 to 50 units and 60 to 100 residents. In some cases, complexes would have 200 or more units, but this will depend on the availability of land, and generally, they would be located in an urban environment. Ideally, one-third of the inhabitants (families, singles, solo parents) will be younger than 40 years, one third 40 to 60 years and one third older than 60 years. All residents should show a willingness to embrace neighbourly co-operation by way of offering each other mutual support. For example, help with driving, shopping, administration, technology, paperwork, child supervision and neighbourly help through illness and emergencies.

In an IGC people live in a wide range of residential settings. Without going into detail, some types of housing include:

  • Newly built residential developments, in which the entire development is specifically planned to be affordable. These developments can range from individual houses to apartments to single-room-occupancy facilities.
  • Newly built affordable housing units, as part of mixed-income development. These units can also take the form of individual houses or apartments.
  • Existing housing units renovated or converted from their previous use, to become affordable.

There could also be specialised types of housing in an IGC, such as:

  • Co-sharing housing, or congregate housing, where residents have separate bedrooms but share common areas such as kitchens or yard spaces.
  • Transitional housing designed for temporary use by people who are recovering from physical or emotional problems. This type of housing, which may also involve shared space, is often accompanied by support services nearby or on site.
  • Categorical housing – housing for members of certain social groups. Seniors are one of the most common of these groups but can be for the disabled, for victims of domestic violence, for people living with AIDS, for grandparents serving as parents, and students.

The financial arrangements in an IGC can vary as much as the physical housing itself. The financing to develop and IGC can come from federal, state, or local government, from quasi-public housing corporations or partnerships, from social agencies, or purely private developers. Banks can supply loans on various terms. On the other side, residents of affordable housing units may be partly or fully subsidised by the direct government or private subsidies or loans.

The success of IGCs has been well documented in projects such as Humanitas, a Retirement Village in Deventer, Netherlands, 2013 where university students live rent-free alongside elderly residents. Students can come and go as they please. Students contribute 30 hours/month of activities such as watching sports, celebrating birthdays, offering company when seniors are ill, etc.

Benefits of IGC

It is important for everyone, irrespective of their age, to have a community supporting them through the various stages of their lives. Intergenerational Communities bring together people of all ages fostering relationships, understanding and improvements in health and wellbeing. Children, teens, adults, and seniors coexist within a built environment, creating richness in these relationships, which supports a real sense of family and community.

For Seniors

Seniors who work with children and the youth live longer and boast better physical and mental health than those who do not, and those in IGC arrangements experience many benefits, including:

  • Improved cognitive functions – IGCs increases seniors’ social network through regular participation in the activities of a social network. It helps to keep them “sharp” and has a positive impact on those with dementia.
  • Decreased incidence of depression – Older adults want to remain productive and like to know that they are making valuable contributions. Working with children and youth promotes social interaction, increases feelings of self-worth and reduces feelings of depression.
  • Lifelong learning – Older adults can teach a lot to children and teenagers, but youth can be teachers, too. Seniors can learn about technology and other innovations from the younger generation.
  • Improved health – Seniors who work with children stay healthier. They burn 20% more calories, become less reliant on canes, experience fewer falls, and perform better on memory tests.

For Youth

While the benefits of IGCs are clear for seniors, there are also proven benefits for the youth:

  • Increased self-esteem and confidence – The skills children gain from regular interactions with older people helps them develop their own social networks and improves communication and problem-solving skills.
  • Social maturity – Children who interact with seniors in an IGC experience have higher personal and social development by on average 11 months compared to their counterparts. These children also have a better attitude towards ageing and develop a strong sense of community.
  • An increased sense of belonging – Children who participate in intergenerational programs develop a sense of purpose. As their intergenerational social network becomes part of their daily lives, that sense of purpose becomes tied to their place in the community.

For the Community

Furthermore, IGCs benefit the entire community:

  • A vibrant and cohesive community – Intergenerational programs break down barriers and promote tolerance and understanding. As different age groups mix, and discover common interests, it creates a strong group identity.
  • Preservation of cultural traditions – Older adults can pass down customs, cultural traditions, and personal stories to children outside of their own family. This helps to build a sense of identity and encourages tolerance while preserving traditions for future generations.
  • Increased collaboration amongst local organisations – Successful partnerships between senior and youth organisations as well as schools demonstrate what can happen when local organisations come together. Those successful relationships encourage other groups to forge relationships that benefit the entire community.
  • Chain Reactions – Community support for children and youth programs – As the community enjoys success in an IGC, individuals are more likely to support social programs. In addition, children in IGCs are more likely to volunteer in the community as they get older and help community groups, creating an ongoing cycle of giving back.

For the Government

For Government there are benefits as well:

  • Less pressure on the health care system – With seniors being both physically and mentally active within the IGC, health benefits are realised, and pressure on Government funded health care services is reduced.
  • Less cost on child care – Grandparents living closer to their grandchildren can take care of the younger ones while the parents are at work. Seniors who are still physically able may assist in the running of child care centres. Not only do these programs help older adults stay active, healthier, and connected to their communities, they improve educational outcomes for children, strengthen tolerance and cooperation, and foster a lifelong attitude of reciprocation and community-mindedness.

However, for these communities to be thriving, they must be well-planned and designed to create social interaction among people. Through the implementation and management of clearly defined guidelines, residents of all ages within the IGC thrive.   

Cooperative Housing

In America, Housing Cooperatives play a significant role in their housing market and represent 40% of their housing stock. John Lennon was a member of one. Former President Richard Nixon and Madonna were rejected by one. When you buy a home in a housing cooperative, you don’t purchase real estate, but you purchase shares in a company, whose only asset is the property. This company owns the home you live in, and you hold no parts of the building like any other member. You secure the right to occupy it through what’s called a “proprietary lease” or occupancy agreement.

A cooperative is essentially a non-profit company, complete with a board of directors. All the members of this cooperatives purchase shares in the corporation and are labelled as shareholders. Cooperative owners each own a cooperative interest as follows:

  1. The member’s ownership interest in the cooperative company is represented by a certificate of ownership or company shares; and
  2. an exclusive right to occupy a dwelling unit (the cooperative company owns that), which is represented by an occupancy agreement or proprietary lease. 

To be part of a cooperative requires two significant costs commitments. Initially, the resident is required to pay a one-time share cost which can be considered as a deposit. This initial cost is quite substantial, and instances are between 20% to 35% of the value of a cooperative housing unit. After paying this initial cost, members are required to pay a monthly fee and charges (levies). The monthly levies cater to the maintenance and other expenses associated with running and operating the cooperative.

Types of housing cooperatives

Since its inception, housing cooperatives have evolved, and many groups have created their structures. Below are the more common structures under this model:

  • Market-rate cooperative – This cooperative is treated like most standard residential properties, where owners can sell their shares whenever they want and for as much money as they wish. You acquire equity much the same as in other types of home ownership.
  • Limited equity cooperatives – This cooperative is usually geared toward those seeking affordable housing. There is a cap on how much equity members can earn in their homes, so they can’t sell their share for a considerable profit. This restriction works to keep these cooperative communities affordable and carry certain benefits such as lower-interest loans, tax breaks and grants.
  • Leasing cooperatives – Also known as zero-equity cooperatives, these properties are owned by outside investors (usually not-for-profit organisations) who then lease the property back to the corporation. The cooperative may buy the property later if it comes up for sale and converts into one of the other types of cooperatives.
  • Mutual housing associations – Non-profit corporations established to develop, own and operate housing. The corporation is held and controlled by the residents who move in.

Member Benefits

One of the attractive benefits of cooperative ownership is the tax advantages. Tax payments for the premises are shared by the cooperative, so as a member and shareholder you don’t receive an individual tax account. Instead, your portion of the tax is included in the maintenance or levies you pay to the cooperative monthly. In addition to the tax benefits and low occupancy, cooperatives have other benefits:

  • Limited liability: As a member shareholder you have no personal liability for the cooperative’s mortgage, but you will be responsible for paying your personal loan (if you have one).
  • Community control: Member shareholders participate in property decision-making.
  • Consumer influence: As an association, a cooperative can exert influence on local governments and the cost of rates and taxes.
  • Surplus income: Where there is a surplus, the unspent funds are returned to the shareholders.

Housing cooperative tenure

  • The right of inheritance: The dependants of a member of the housing cooperative have the right to inherit that members’ share in the cooperative, with the approval of the cooperative’s board of directors if they qualify to occupy the unit or inherit the member’s cash funds;
  • Legal structure: A cooperative is a legal entity jointly owned and controlled by its members. Each member has a share in the cooperative, but it is the cooperative, which owns the property; Members have a right to live in a unit under the terms and conditions of the right of occupancy agreement they sign with their cooperative;
  • Exit repayment: When a member leaves a housing cooperative, that member has a right to receive a percentage of the amount of money that she/he has contributed to the cooperative;
  • Membership: Members have a share in their cooperative. Members have a voice and vote in the decision-making process of their cooperative. They can exercise this right at the Annual General Meeting of the cooperative and any other special meetings; 
  • User charges and members’ equity: Members contribute to the maintenance and operation of the housing cooperative. Members pay an amount to join the cooperative and monthly user levies. The distribution of the member’s equity in the cooperative when they depart the cooperative is described in the right of occupancy agreement.


Depending on the size and complexity of the housing units in a housing cooperative, there are two options in which a housing cooperative is managed.

  • Elected members: As each resident has a share in a cooperative, they have the right to elect members to a committee to manage the operations and to administrate of the cooperative. This can work where there is a limited (less than 25) amount of housing units.
  • Housing manager: The members of the cooperative appoint an experienced independent manager to run the operations of the cooperative and report to the elected board of the cooperative on an agreed regular basis. This works in a larger housing complex plus there is a succession in the management especially when older members pass on or decide to move out.

Other housing cooperatives

A housing cooperative is established to meet the needs and visions of certain groups of people such as people from low-income households, people of a specific ethnic or religious background, artists, people with disabilities, or environmentally conscientious groups. There are several types of cooperative housing, often called “intentional” housing, including:

  • Cohousing is where member residents own their home under separate title but share in community activities.
  • Communes, where members buy a share of the cooperative, which owns the land. Members share the property and resources.
  • This type is where members live in individual homes and share the objective to protect and improve the environment. In many cases, eco-villages encourage self-sustainability and may have eco-businesses, such as organic produce. 
  • This falls under the sector of a retirement village or over 55s. The significant advantage with a Senior’s cooperative is the ownership structure and unlike current models of the “lease for life” where seniors have no say on how the village is managed.

While there are instances of dissatisfaction, generally members develop a sense of pride and belonging, help their neighbours, and are supported by a close community of people with shared values. Cooperative housing addresses many issues arising from Australia’s housing crisis, including affordability, environmental impact and a stronger sense of neighbourhood.


  • Security of tenure:  Cooperative members are given the opportunity for permanent tenure, therefore, stabilising their lives and their community. It provides people on low to moderate incomes with the opportunity for secure housing. 
  • Lower operating and maintenance costs: Members of a housing cooperative can take on responsibilities to assist in reducing the operational and maintenance costs of their cooperative.
  • Building community spirit:  Cooperatives help to forge a strong feeling of community among their members. The members learn to work together and form bonds with one another. 
  • Building members skills: Cooperatives offer the members a chance to develop leadership skills. Specific financial, maintenance and managerial skills also develop among cooperative members in the course of their operation and management of their cooperative. 
  • Educate members: Since it is the members that make all the decisions, it is essential that they learn about the process and cooperatives.  
  • Create a positive community environment:  The members of a housing cooperative can be counted on to support reasonable programs to fight vandalism, reduce crime, reduce traffic nuisance and improve their environment in their cooperative community.
  • Demonstrate the value of working together: Cooperatives can demonstrate to their members the value of group action to address any common problem.
  • Limits speculation: A Cooperative can limit the resale value of the units in a complex to retain affordability housing and therefore restricting real estate speculation by its members. 
  • Create a quality environment: Since the members collectively own the common areas such as open spaces or gardens, they can invest more into it and create a quality environment.


  • Cooperative ownership: Institutions and individuals in some communities do not readily accept cooperative ownership. Lenders may be reluctant in providing financing to single mortgage housing cooperatives. 
  • Lack of member participation:  Housing cooperatives are organised, operated and managed by their members. If the members do not actively participate by attending the general and special meetings and not fulfil their responsibilities to their cooperative, the cooperative will suffer and could fail.
  • Time and money:  Since the concept is not well known, it takes a long time to make everyone understand the process.
  • Collateral Security: A loan for the cooperative as a single entity or members to borrow to move into a cooperative is tough under current Australian banking practices. 
  • Approval of new members: The cooperative board must approve applicants, a process that includes interviews and documentation that could consist of several years’ worth of tax records.
  • Renovations. Once they buy in, members are not allowed to make any renovations without the board’s approval.

Well led, effectively managed, and adequately financed housing cooperatives with committed members maximise the advantages of housing cooperatives. They have the best chance of growing into viable and stable cooperatives that can create many benefits for members.  


The cohousing concept originated in Denmark in 1960s and today there are cohousing communities in many other countries around the world. Cohousing is an intentional community of private homes clustered around shared space. The development of a Cohousing is initiated by a group of like-minded people coming together to build their individual homes under a community structure, whereas Cooperative Housing is undertaken by a developer or a small group of individuals and then offering homes to the broader public.

Each household is private and has its independent income but work collaboratively and jointly to manage communal activities and shared areas. The legal structure can fall under a Body Cooperate of a Housing Cooperative model.  

Structure of a cohousing community

Most cohousing arrangements have certain features in common:

  • Common house – This is a separate communal building where residents gather together for group meals, meetings, parties, and other activities. The house consists of a large kitchen and dining area where residents can cook and eat together regularly or for special occasions. There is also a shared laundry area, a living room for lounging or holding meetings. Some common houses may include guest bedrooms, a shared workshop, and a room for kids for play sessions or as a child care centre.
  • Communal outdoor area – Residents also share outdoor spaces, such as parking areas, walkways, lawns, and gardens. By having the car parking area on the outer edges allows a common walkway to their home and becomes a way for neighbours to greet and chat. It also creates a car-free zone which is safer for children to play. Outdoor areas can also include special amenities such as a pool, a playground for kids, gardening, playing, and socializing.
  • Clustered Housing – Clustered closely around the common house and outdoor area are smaller individual homes. These could be single level dwellings or townhouses. Each home is private with bedrooms, bathrooms, and a kitchen. As the common house provides additional facilities, these private homes can be smaller in area. For example, the kitchen can be smaller, and there is no need for a laundry or a games area for the kids.

Types of cohousing

Cohousing communities can range from 8 to 60 individual homes, but most average between 20 and 30. A typical community can house a wide range of households, including single people, childless couples, parents with young children, and retirees. Specific types of cohousing include:

  • Urban communities – These communities are located within a city and can take the form of an apartment complex or a group of townhouses. Most new cohousing communities in a city look for sites within a TOD (transit orientated development) so that residents can get around without having to own a car.
  • Suburban and rural communities – Cohousing communities in the country have a bit more room to spread out. Individual units may be single-family houses or duplex units. Rural communities often choose to cluster homes tightly together to leave more land available for farming and recreation. 
  • Mixed-use communities – Some cohousing communities share their land with businesses and public spaces. These mixed-use developments can combine cohousing units with affordable rental apartments, retail outlets, restaurants, offices, and an open courtyard.
  • Senior communities – Most cohousing communities are for people of all ages, but some may focus specifically on providing a home for retired seniors after. Senior cohousing offers retirees a chance to live independently as they age, while still having a close-knit group of friends and neighbours to support them physically, emotionally, and socially.

Pros and Cons

There are many benefits of being part of a cohousing community which include:

  • Financial Benefits – Living in cohousing can save you money in other ways, too. For instance, you can save on the following:
    • Utilities. Most cohousing projects are built in eco-friendly methods that save energy and water.
    • Food. In many cohousing communities, residents share meals regularly.
    • Child Care. Parents can take turns looking after each other’s children or chip in together to hire a nanny, at considerable savings per child.
    • Senior Care. Seniors living in cohousing always have people around to keep them company or give them a hand with chores.
  • Capital and maintenance benefits – As cohousing residents are involved in the design of their future home, they can prioritise technologies and design aspects that may increase upfront costs, but significantly reduce the ongoing operating costs of their homes. Depending on the cohousing model, affordability gains can be realised through:
    • No development profits as there is no speculative risk and no need for marketing costs
    • Shared spaces mean fewer materials required in the design of new housing developments
    • Reduction of ongoing operation and maintenance costs
  • Environmental Benefits – Cohousing can also benefit the environment in more specific ways, such as:
    • Preserving open space. Clustering houses tightly together leave more green space open, which protects water quality and provides habitat for wildlife.
    • Growing food locally. The additional open space can also be used for vegetable gardens that provide a significant portion of the members’ food.
    • Saving energy. Many cohousing developments are usually built with energy-saving features such as proper insulation and energy-efficient heating/cooling systems.
    • Reducing car dependence. In urban areas, cohousing communities tend to be built within walking distance of schools, shops, and public transport.

Despite the many benefits of living in cohousing, there are specific cons as well.

  • Property cost – The cost of cohousingcan be higher than competitive housing as discussed above. This combined with potentially steep membership dues, may make cohousing unaffordable.
  • Control over sale – Owners may not have complete control over their property should they decide to sell since many communities have first right to buying or refusal.
  • Limited resale market – Should this be Higher Development Costs? One of the significant problems, however, is that new cohousing communities may take more time, money and energy to plan and develop than initially estimated.
  • Loss of privacy – While most members enjoy social benefits, cohousing can also be invasive and restrictive regarding privacy and individualism.

Starting a cohousing community

Below is a list of items needed to be undertaken when starting a cohousing community from scratch:

  • Create a Vision Statement – Clearly outline what you want your community to achieve. Give a copy of this statement to every future member.
  • Develop a decision-making process – Before you can start a project, you need to make some necessary decisions on how it will be managed. This includes the requirements for new members, the decision makers, how to run your meetings, how to resolve conflicts, and how to keep records.
  • Structuring finances – Make some financial decisions, like how to pay for expenses, who should oversee financial records, and whether to charge a membership fee.
  • Establishing by-laws – Establish the rules and regulations on what households can and cannot do plus the house rules for using the communal facilities.
  • Open a bank account – Once the operating entity has been established, you should set up a bank account, and use it for all your community expenses.
  • Collect fees – All members should pay a small sum to join your community which includes an entrance fee and an ongoing membership fee.

National Disability Insurance Scheme (NDIS)

The National Disability Insurance Scheme (NDIS) is an Australia-wide scheme to support people with permanent and significant disability which will replace the current disability support system.

Through the NDIS, people with disability will be able to access the reasonable and necessary supports they need, to live the life they want and achieve their goals and aspirations. Currently, there are around 410 000 Australians with a significant and ongoing disability that would need long-term care and support.

The Commission appointed by the Government proposed that the NDIS would include the following features:

  • entitlements to individually tailored supports based on the same assessment process;
  • certainty of funding based on need;
  • genuine choice over how needs are met (including choice of provider);
  • local area coordinators and disability support organisations to provide grassroots support;
  • a long-term approach to care with strong incentive to fund cost-effective early interventions.

Government spending on NDIS

The NDIS is a significant and highly complex reform in funding disability care and support. The NDIS represents a significant new area of Commonwealth responsibility and expenditure. The estimated annual cost (nearly $14 billion) is around the same amount spent on the Disability Support Pension which is more than the current annual cost of the Pharmaceutical Benefits Scheme ($10 billion), and not substantially less than the current annual cost of Medicare ($18 billion). Currently, the states and territories provide around $4.7 billion for disability services, while the Commonwealth Government provides around $2.3 billion.

Benefit to developers

The Government has provided incentives for developers to deliver NDIS accommodation as it cannot deliver the type of accommodation on its own. However, there are some key aspects to consider:

  • NDIS Accommodation – In order to build accommodation for NDIS tenants, the developer or an associate must be an approved NDIS Accommodation provider.
  • Limited numbers per development – The aim of the Government is integrating NDIS tenants with local communities and have therefore limited the number of tenants per development. For example, in an apartment block there should be no more than 15% apartments allocated for NDIS accommodation.
  • Accommodation standards – The NDIA has set out strict planning, design and specification to be provided before accommodation can be approved. The design and final build have to be approved by a qualified assessor.
  • Tenant qualification – NDIS is for people with permanent disability, including episodic conditions such as psychiatric, significantly reduced functioning in self-care, communication, mobility or self-management and for persons requiring significant ongoing support for their whole life.
  • Lease type – People who qualifymust apply to the Government and if approved, the Government will underwrite the lease for the agreed period with a 90-day notice period under certain conditions.
  • Rental Income – There is a base rent set out by the Commonwealth Government and depending on the location of the building, there is a multiplier factor applicable to that location. This rental must be approved under the participants plan by the co-ordinators.


The world is continually evolving and so are the banking and financing sectors. With the demand for new and affordable housing, alternative funding methods have been created by both private entities and Government. Below are some examples of these alternative sources of funding in both debt and equity.

Ethical funds

Socially responsible investing, or social investment, also known as sustainable, socially conscious, “green” or ethical investing, is an investment strategy which seeks to consider both financial return and social good to bring about a positive change. Recently, it has also become known as “sustainable investing” or “responsible investing”. There is also a subset known as “impact investing”, devoted to the conscious creation of social impact through investment.

Our built environment is responsible for half of all global energy use and half of all greenhouse gas emissions. Buildings consume one-sixth of all freshwater, one-quarter of world wood harvests and four-tenths of all other raw materials. The construction and later demolition of buildings produce 40% of all waste. It, therefore, no wonder that new buildings are coming under scrutiny, and “green” rating tools are the primary method for measuring this.

In Australia, we have NABERS (National Australian Built Environment Rating System), which is an initiative by the Government to measure and compare the environmental performance of buildings and tenancies.  Ethical funds are willing to invest in new projects that have a “green” rating and comply with several ethical and sustainable criteria.

How ethical funds work (courtesy Varna Capital)

“As an example, a developer is building and owning a mixed-use site for $50m. We consider the design and energy-consuming technologies for the site (i.e. lighting, solar, metering/embedded network, thermal insulation, glazing performance, energy efficient white-goods, hot water, HVAC). Varna assesses the ongoing lifecycle cost of these technologies. We then create a package outlining which products have an attractive return on investment based on the predicted energy costs. For this example, $5m is taken out of the capital cost of the project and funded using green bonds (at a meagre rate). This will reduce the developers Capex and Opex, improving cash flow and returning profit. This reduction of $5M (or 10%) contributes to reducing the project’s development finance LVR without using additional equity.”

Social impact bonds

Social Impact Bonds (SIBs) also known as pay for success financing, a compensation for success bond, social benefit bond or merely a social bond, is an innovative approach to financing social service programs that combine outcome-based payments and market discipline. They are designed to raise private capital for intensive support and preventative programs which are suitable to be funded by the government on an outcome basis.

How Does a Social Impact Bond Work?

The steps involved in the process include:

  • Identifying the problem and possible solutions – Generally, the process starts when the government detects a challenge or problem in the public sector. Some of the difficulties include public safety, health, housing and family support services.
  • Raising funds for the project from private investors – After the potential solution has been identified, the government works to attract private investors to the project. The parties determine the quantifiable metrics that will indicate the project’s success. Interested investors provide the required capital to support the operations and execution of the solution.
  • Implementing the project – The project manager or developer uses the obtained funds to finance the project’s operations, and the service provider begins the implementation of the program.
  • Assessing the project’s success and paying the project manager and investors – At the end of the fixed term, an independent evaluator completes the assessment of the project’s success based on the predetermined metrics. If the project meets the criteria, the government pays the project manager or developer, who then transfers the funds to the investors in the social impact bonds.

National Housing Finance and Investment Corporation

The National Housing Finance and Investment Corporation (NHFIC) is a crucial part of the Australian Government’s Reducing Pressure on Housing Affordability plan, announced in the 2017-2018 Federal Budget. The aim is to provide finance for housing from those struggling to put a roof over their head. It targets those in affordable housing, private renters and first home buyers.

Bond Aggregator

To help provide better solutions for registered community housing providers, NHFIC operates an Affordable Housing Bond Aggregator (AHBA). The AHBA aims to provide cheaper and longer-term secured loan finance for community housing by issuing bonds in capital markets.

What is a bond aggregator?

The NHFIC is designed to aggregate and source large amounts of capital from the bond market to provide lower interest, long-term loans to not-for-profit Community Housing Providers (CHPs) developing housing for lower-income households. The intention is that money would be raised efficiently with reduced financing costs rather than in an expensive one-off transaction such as when borrowing from a bank.

What are the benefits of a bond aggregator?

The benefits are that it is relatively transparent and straightforward as it minimises the impact of debt on government budgets, draws on the successful experience and expertise of other countries and provides lower cost finance to community housing providers.

National Housing Infrastructure Facility (NHIF)

In addition to housing finance, NHFIC operates a $1 billion facility, known as the National Housing Infrastructure Facility (NHIF) which offers concessional loans, grants and equity investments to help support eligible enabling infrastructure projects. These projects include the infrastructure to support new housing, particularly new affordable housing and would cover electricity — water, sewerage and transportation. The facility is only available to Government entities and registered community housing providers.

Crowd funding

Crowdfunding is an internet platform of funding a project or venture by raising small amounts of money from many people. Through social media outlets like Facebook, Twitter and LinkedIn it reaches out to an audience of potential investors. The strategy of crowdfunding is that more people are willing to invest a small amount of money in an area of their interest which opens doors for businesses/start-ups to investors they could never have reached otherwise.

The current crowdfunding model

Opportunities to purchase properties via crowdfunding platforms in Australia are currently limited to residential and rural properties. Most real estate crowdfunding deals involve equity investments. In this scenario, the investor is a shareholder in a specific property, and their stake is proportionate to the amount they have invested. Returns are realised in the form of a share of the rental income the property generates, less any service fees paid to the crowdfunding platform. Investors may also be paid out a percentage of any appreciation value if the property is sold. On the property development side, equity is often one of the most difficult to obtain for newer, or smaller developers. Property crowdfunding platforms can be a benefit to property developers looking for further sources of capital from qualified Investors.

Crowdfunding and Blockchain

The problem with the currently established crowdfunding platforms is that they are centralised bodies, charging high fees and influencing the projects. The alternative is Blockchain-based crowdfunding which can be a game changer because it decentralises the funding model from current models. Some existing crowdfunding platforms charge 5% of the total funds received, with an additional 3-5% going towards expensive payment processing. With blockchain’s distributed ledger, there is the potential to remove this third party, which will save a considerable amount of the fundraising costs.

So how does Blockchain Crowdfunding work? It is like the current crowdfunding platform, with the creators posting their project and then soliciting funds from a community of interested people. The difference is that the Blockchain platform will be able to generate the cryptocurrency or tokens to sell to potential backers. These cryptocurrency tokens will be accounted for and kept track of by the blockchain, which makes it immutable and impossible to forge. The tokens represent shares in the project, and just like ordinary shares in the stock market, they have the potential to go up in value. 

Blockchain crowdfunding for property investment or development can work by allowing a crowdfunding platform to create their digital currencies which are sold to potential investors. This allows the platform to raise funds from early investors, while the investors also have the potential to make money if the value of their cryptotoken share increases.

Some advocates consider this a purer form of crowdfunding because it removes any intermediaries between the backers and the platform. It also has the potential to boost new blockchain platforms, because it will give the blockchain community a new way to fund its projects.


The Future of housing in Australia requires vision and innovation beyond the status quo and understanding of emerging needs and trends. The mix of the concepts explained under this section is a potential solution towards housing affordability that can have a social impact upon Australian communities. Developers with vision should start looking at adopting Intergenerational Living based on a Cooperative Housing model in their new developments. Furthermore, with climate change, they should pay more attention to the design of their development and ensure ecologically sustainable factors are considered. By adopting these principles, they will be creating a better environment for future generations.