ENABLE CO-LIVING NEWS
An Enable Observer market briefing for co-living and rooming house investors
What we're seeing on the ground. Not advice.
21 September 2026
Market Briefing
Negative gearing now favours new builds. Here is where a rooming house sits.
Co-Living News, 21 September 2026
1.8%
Melbourne rental vacancy rate, August 2026. National rate 1.3%.
$695/wk
Melbourne combined advertised weekly rent, 30 days to 4 September 2026.
+47% to +52%
Projected growth in Greater Melbourne households, 2021 to 2046. The fastest of any capital.
1 Jul 2027
Negative gearing on residential property limited to new builds for purchases after 12 May 2026.
Key dates this week
- 10 Aug 2026Self-managed super funds can no longer take out new limited recourse loans to buy residential property. Existing loans continue.10
- 21 Aug 2026Treasury consultation closed on the draft definition of a 'new residential dwelling'. Draft, not yet law.8
- 1 Oct 2026Victorian Energy Upgrades discount for ceiling insulation becomes available.12
- 1 Mar 2027Victoria's minimum energy efficiency standards for residential rental properties begin to phase in.12
- 1 Jul 2027Negative gearing limited to new builds; the 50% CGT discount is replaced by cost base indexation and a 30% minimum tax.7
August's rental data shows a market pausing rather than turning in Melbourne. Vacancy ticked up to 1.8% and advertised rents were flat over the month, while licensed rooming house operators in the eastern and south eastern suburbs are still advertising rooms from $201 to $430 a week, most with bills included.
The bigger story is tax. The negative gearing changes are now law, and from 1 July 2027 only new builds keep the ability to offset rental losses against salary. Treasury's draft rules say what counts as new. They are clear for a build on vacant land and less clear for a knockdown, and they do not mention rooming houses at all. Section 04 sets out what the draft says and the question to put to your accountant.
Why a builder writes this briefing
Enable Group holds both commercial and residential builder's licences and focuses on rooming houses, co-living developments and Specialist Disability Accommodation. This briefing is our own observation of the market, drawn from public sources. It is general information, not financial, legal or tax advice.
The demand behind the decision
Household growth and the rental market, from the ABS and SQM Research
+47% to +52%
Greater Melbourne households, 2021 to 2046, from 1,882,100 to between 2,768,900 and 2,859,900
3.44M to 3.96M
Lone person households in Australia by 2046, from 2,637,500 in 2021
506,400 to 608,500
Group households in Australia by 2046, from 405,700 in 2021
Melbourne is projected to add more households than any other Australian city over the next two decades, and households are forming faster than the population is growing. The ABS projects lone person and group households, the two groups most likely to rent a room, to grow by roughly 30% to 50% nationally by 2046. Projections illustrate what would happen if assumptions held; they are not forecasts.2
The whole-dwelling rental market gives the other half of the picture. These are advertised rents for houses and units combined, not room rents, and they show Melbourne holding steady while Sydney and Canberra soften.1
| Capital | Vacancy, Aug 2026 | Advertised weekly rent | 12-month change |
|---|---|---|---|
| Melbourne | 1.8% | $695.18 | +6.1% |
| Sydney | 1.7% | $909.53 | +5.4% |
| Brisbane | 0.9% | $756.15 | +7.7% |
| Perth | 0.6% | $801.73 | +7.1% |
| Adelaide | 0.6% | $644.04 | +3.4% |
| Canberra | 2.1% | $687.88 | +3.3% |
| Hobart | 0.6% | $607.37 | +10.4% |
| Darwin | 0.4% | $720.65 | +8.7% |
| National | 1.3% | $701.53 | +7.3% |
SQM Research, released 15 September 2026. Vacancy for August 2026. Advertised rents are combined houses and units for the 30 days to the week ending 4 September 2026. These are asking rents on new listings, not rents achieved. Source 1.
What this data does not tell you
Household growth is a national and metropolitan trend, not demand on your street. SQM describes August as the usual winter lull and says the spring leasing season will show whether rents firm again; it expects Melbourne rents to have little room to rise into summer. A room rent for your site depends on location, transport, room size and bathroom arrangement, and needs its own appraisal.
What a room is actually renting for
Advertised weekly rents from licensed operators' own rate cards, checked 21 September 2026
This week's table is built entirely from two licensed rooming house operators who publish weekly rates on their own websites. Every figure is quoted by the operator as a weekly rent, and most include electricity, gas and water. Both operators concentrate in the eastern and south eastern middle ring, so the table does not cover the western or outer growth suburbs.34
| Location | Operator | Advertised weekly rent | Bathroom | Bills |
|---|---|---|---|---|
| Clayton, Dennis St | RoomingKos | From $430 per week | Not stated | Included |
| Oakleigh East, Kings Ct | RoomingKos | From $390 per week | Not stated | Included |
| Clayton, Murdo Rd | RoomingKos | From $380 per week | Not stated | Not stated |
| Chadstone, Waverley Rd | RoomingKos | From $300 per week | Not stated | Included |
| Malvern East, Warrigal Rd | RoomingKos | From $300 per week | Not stated | Included |
| Box Hill, Kangerong Rd | Rolling Realty | From $284 per week | Private ensuite | Included |
| Mulgrave, Monash Dr | RoomingKos | From $280 per week | Not stated | Not stated |
| Malvern East, Batesford Rd | RoomingKos | From $280 per week | Not stated | Included |
| Box Hill, Kangerong Rd | Rolling Realty | From $254 per week | Shared | Included |
| Box Hill, Kangerong Rd | Rolling Realty | From $201 per week | Shared | Included |
Advertised 'from' rents for a single occupant on each operator's published rate card, checked 21 September 2026. Every figure is stated by the operator as a weekly rent; no conversion has been applied. RoomingKos rows are properties listed as available. These are asking rents, not achieved leases. Sources 3 and 4.
Get a rental appraisal for your own site
Operator rate cards show the range. What a room on your site could rent for depends on its suburb, transport and design. Enable Group can introduce you to a property manager who specialises in rooming houses for an independent rental appraisal.
Book a Discovery SessionWhat it costs to buy one already built
Advertised prices and advertised income for established Melbourne rooming houses
Nine-room rooming houses in Melbourne's west are advertised between $1.65 million and $2.35 million. Three listings in Melton and Melton South have been reduced from $1,720,000. The gross yields below are our own arithmetic on each agent's advertised price and advertised weekly income, before any costs.56
| Location | Rooms / baths | Advertised price | Advertised income | Gross yield |
|---|---|---|---|---|
| Altona Meadows, Kiora St | 9 / 9 | $2,350,000 | $3,905 per week | 8.6% |
| Deer Park, Hogan St | 9 / 9 | $1,750,000 | $3,375 per week | 10.0% |
| Melton, 8 Marina Dr | 9 / 9 | $1,675,000 (was $1,720,000) | $3,175 per week | 9.9% |
| Melton, 6 Marina Dr | 9 / 9 | $1,675,000 (was $1,720,000) | $3,175 per week | 9.9% |
| Melton South, Fraser St | 9 / 9 | $1,650,000 (was $1,720,000) | $3,175 per week | 10.0% |
| Maddingley, Bacchus Marsh | 6 / 6 | $1,200,000 | $2,250 per week | 9.8% |
Advertised prices and advertised weekly income from Zammit Real Estate's rooming house listings, checked 21 September 2026. Gross yield is advertised weekly income multiplied by 52, divided by advertised price. For the Maddingley listing this gives 9.8% against an advertised yield of 10.6%. Listings marked sold or under offer without a published price are not shown. Income figures are the agent's and have not been verified. Sources 5 and 6.
Two things to check before relying on a listing
First, test the advertised income against current room rents in that suburb. The listings above work out at about $353 to $434 per room per week, and section 02 does not cover the western suburbs where most of them sit. Second, the tax treatment has changed. An established rooming house bought after 7:30pm on 12 May 2026 will generally not be a 'new' dwelling for its buyer, so rental losses from 1 July 2027 could only be offset against residential rental income or residential capital gains. See section 04.
Compare building with buying
If you own land or are weighing up a purchase, Enable Group can cost a new build on your site so you can set it against today's asking prices, with the tax position in view.
Book a Discovery SessionTax settings changing around you
What is now law, what is still draft, and the open question for rooming houses
The core negative gearing and capital gains changes passed in June and take effect from 1 July 2027. What still sits in draft is the detail of which dwellings count as 'new'. Treasury's consultation on that definition closed on 21 August 2026.78
| Change | Status | Applies | What it means |
|---|---|---|---|
| Negative gearing limited to new residential dwellings | Law | From 1 July 2027 | Properties held at 7:30pm AEST on 12 May 2026 are exempt. For later purchases of established dwellings, rental losses can only offset residential rental income or residential capital gains. |
| 50% CGT discount replaced by cost base indexation and a 30% minimum tax | Law | Gains accruing from 1 July 2027 | Applies to individuals, trusts and partnerships. Owners of a new residential dwelling can choose to keep the 50% discount. |
| Definition of a 'new residential dwelling' | Draft | Draft applies from the 2027-28 income year | New if built on land with no dwelling on it, or if the number of dwellings on the land increases, or if bought within 24 months of its first certificate of occupancy. |
| SMSF borrowing for residential property | Law | From 10 August 2026 | No new limited recourse loans for residential property. Existing loans continue and can be refinanced. |
General information only, not tax advice. The draft definition is an exposure draft and may change before it is legislated. Sources 7 to 10.
The question the draft does not answer
Treasury's draft makes a knockdown count as new only where the number of dwellings on the land goes up. It does not mention rooming houses. A rooming house is usually one building on one title, with many rooms. Whether replacing one house with one rooming house would count as an increase in dwellings is not addressed. A build on vacant land sits more clearly inside the draft. Talk to your accountant about how the final rules would treat your site before you commit, and ask again once the law is settled.
The compliance layer that protects the investment
When a Victorian rooming house needs a planning permit, and what applies regardless
A domestic-scale rooming house can be exempt from a planning permit in several residential zones, provided it meets every condition in Clause 52.23 of the planning scheme. Miss one and a permit is required. A building permit and council registration are needed either way.11
Separately, Victoria's minimum energy efficiency standards for residential rental properties phase in from 1 March 2027, covering heating, cooling, hot water, shower heads, ceiling insulation and draughtproofing, with cooling required in every rental from 1 July 2030. How each standard applies to a particular rooming house is worth confirming, and a new design can be drawn to meet them from the start rather than retrofitted.12
| Requirement | Condition for the planning exemption |
|---|---|
| Floor area | Total floor area of all buildings on the land no more than 300 square metres, excluding outbuildings. |
| Residents | No more than 12 people. |
| Bedrooms | No more than 9, each reached from inside the building through a shared entry. |
| Shared spaces | A shared kitchen and a genuine living area sized for the maximum number of residents. |
| Garden area | In the General Residential Zone: 25% of a 400 to 500 square metre lot, 30% of 501 to 650, 35% above 650. |
| Still required | A building permit, and registration as prescribed accommodation with the local council. |
Clause 52.23 as explained by Wyndham City Council, checked 21 September 2026. Zone conditions and overlays such as heritage still apply. Source 11.
Why the licence matters
A rooming house that stays within the exemption is a domestic-scale build. One that grows beyond it can move into commercial territory. Enable Group holds both a commercial and a residential builder's licence, so a design that changes scale during planning does not have to change builder.
Enable Observer is a collation of publicly available data and industry observations by Enable Group. It is general information only, not financial, legal, tax or investment advice. Figures are drawn from the third-party sources listed below and may change. Seek advice from qualified professionals before acting.
Figures in this edition were checked on 21 September 2026 and are snapshots, not achieved outcomes. Room rents are shown exactly as each operator quotes them, as weekly figures, so no conversion has been applied. Sale prices and income are the agent's advertised figures. Listings and rate cards change, and regulatory settings, tax treatment and market conditions can change after this date. Always confirm current figures independently before acting.
Sources
- 1.SQM Research, National Vacancy Rates, August 2026, released 15 September 2026
- 2.ABS, Household and Family Projections, Australia, 2021 to 2046
- 3.Rolling Realty, licensed rooming house, Kangerong Road, Box Hill, room rates
- 4.RoomingKos, rooming houses and available rooms
- 5.Zammit Real Estate, rooming houses for sale, page 1
- 6.Zammit Real Estate, rooming houses for sale, page 2
- 7.ATO, Reforming negative gearing and capital gains tax, updated 29 June 2026
- 8.The Treasury, Capital Gains Tax and Negative Gearing, Tranche 2 Legislation consultation
- 9.The Treasury, Exposure draft explanatory material, New residential dwellings
- 10.MFAA, SMSF residential property borrowing ban now in effect, 11 August 2026
- 11.Wyndham City Council, Rooming houses: exemptions under Clause 52.23
- 12.Consumer Affairs Victoria, New minimum energy efficiency standards, updated 17 August 2026