In partnership with YouGov we conducted a survey to better understand the perception of coliving by its main target: single 18-34 year olds without children.
In France, as elsewhere, the trend is towards "third places": third places are shared places, animated by a community, such as the coworking areas, fablabs, but also colivings. The value of third places comes from the meeting of different profiles, stimulating creativity, exchange and innovation
Within this third party market, the French coliving market should experience very strong growth over the next few years. Nevertheless, industry experts agree that the French coliving market is just beginning to take off. Indeed, the market still lacks legibility, for both investors and consumers, and the business model may still seem fragile because it is new and untested
Today, France has only 5,000 beds available, but has 3,500 beds in the pipeline . The market is attracting more and more highly diversified players, from specialised start-ups to large real estate groups attracted by investment
The social bond and services, the strengths of the coliving model
In a housing market that has been very tense for several years, coliving has strong comparative advantages allowing it to gradually emerge as a valid alternative to renting a furnished apartment. This is notably the case for the dimension of community and social bonding, which represent the main asset of coliving according to the population mainly targeted by this concept: young adults aged 18 to 34, single and without children.
What are the main advantages of coliving?
France, 09.2020, in %
Source: YouGov survey conducted from 10 to 14 September 2020 - Base: French adults aged 18 to 34, single and without children (N=134)
According to Alice Pocachard it is even a necessary condition to belong to the coliving market. Among the very many players currently communicating around this concept, only a few really manage a community within their establishment. This is a central axis of differentiation and a strong growth lever for the coliving market . It is also a key element for Ruben Grave, for whom the maximum size is around 150 residents . Beyond that, the population is too large and the community disappears. Conversely, it takes at least twenty residents to create the community. Coworking actors therefore have a key role to play: that of community animator.
Another asset highlighted by this article is that of the integrated services such as household or video subscriptions. Although this element is an integral part of the concept of coliving, the market still has a strong margin for growth in this aspect: in fact, players can still largely develop their integrated service offer to reach the most premium forms of coliving and thus go beyond the current stage where services are more a communication tool than a reality of the offer
This is all the more necessary since the profitability of the coliving business model is based on services, according to Ruben Grave services, especially when they can be opened to a population outside the coliving (such as coworking, for example), ensure the cost-effectiveness and sustainability of the model.
Competition from furnished rentals
Currently, competition in the coliving market comes mainly from the rental of furnished apartments: indeed, 42% of the target population declare that they prefer a furnished rental to live alone for less than a year . Even with an equivalent budget and location, coliving is not yet a spontaneous alternative to renting a furnished apartment 74% of young adults aged 18 to 34, single and without children, prefer furnished rentals over coliving . One of the main reasons for the low attractiveness of coliving seems to be the lack of knowledge of the concept among the target population
Preferred solution for moving in alone for less than a year
France, 09.2020, in %
Source: YouGov survey conducted from 10 to 14 September 2020 - Base: French adults aged 18 to 34, single and without children (N=134)
Preference between furnished rental and coliving
France, 09.2020, in %
Source: YouGov survey conducted from 10 to 14 September 2020 - Base: French adults aged 18 to 34, single and without children (N=134)
Improve awareness of the concept to unlock market growth potential
The coliving market shows promising prospects, but the main obstacle to its development is the lack of knowledge of the concept The main target group is the 18-34 year old population without children, who are single and without children. Indeed, 53% of them say they are not familiar with the concept of coliving; conversely, only 24% have heard of it and only 8% have experienced it. There is therefore a very high margin for growth in terms of awareness
This lack of knowledge of the concept may thus explain the lack of valorisation of the coliving offer compared to the competition of furnished rentals among the target population. The challenge for players in the sector is therefore to make this concept more widely known and to ensure that the target population fully understands its value proposition and comparative advantages.
Are you familiar with coliving?
France, 09.2020, in %
Source: YouGov survey conducted from 10 to 14 September 2020 - Base: French adults aged 18 to 34, single and without children (N=134)
The impact of Covid-19 on the coliving market
Industry experts anticipate that the impact of the Covid-19 crisis on the market will be positive. Indeed, the period of confinement as well as the limitation of contacts (which implies a weakening of the social bond) will revive consumer interest in the community dimension Young adults should place increasing value on this opportunity to live in community while maintaining some form of independence.
As part of this study, we also surveyed a number of different industry experts:
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