India’s co-living sector is on the verge of a significant transformation. A new report by Colliers India has projected that the co-living inventory in the country will rise from the current 3,00,000 beds to 1 million beds by 2030. This threefold increase is a result of accelerated urbanisation, youth migration, and the growing preference for flexible, affordable, and professionally managed housing solutions.

The co-living segment, which was once seen as a niche urban experiment, is now maturing into a mainstream real estate asset class, poised to address India’s evolving housing needs, especially for students and young professionals. The market size is expected to grow fivefold—from around Rs. 4,000 crore (US$ 465 million) in 2025 to nearly Rs. 20,000 crore (US$ 2.33 billion) by 2030.

According to the report, the current demand for co-living beds stands at 6.6 million and is expected to rise to 9.1 million by 2030. However, the supply is severely limited, with penetration rates hovering around 5%. This creates a significant demand-supply mismatch and a lucrative opportunity for operators and investors to enter and expand in the space.

Colliers India’s Chief Executive Officer, Mr. Badal Yagnik, remarked, “As the population of students and young professionals continues to grow, particularly in urban and tier-II locations, we expect the co-living sector to expand rapidly. Penetration is likely to increase from 5% to over 10% by 2030.”

This optimism is further supported by the sector’s expansion beyond metro cities, with tier-II cities like Indore, Coimbatore, Chandigarh, Jaipur, Visakhapatnam, and Dehradun emerging as new hubs for co-living operations. These cities are witnessing a rise in higher education institutions, start-ups, and corporate presence, driving migration and increasing the need for structured, affordable living arrangements.

Student Housing: A Major Growth Lever

One of the most underexplored segments within the co-living industry is student housing. According to the report, there is a huge demand-supply gap in student accommodation. India currently hosts over 12 million outstation students, but existing institutional and private hostel capacities cater to only about 4 million students, leaving two-thirds of the demand unfulfilled.

This shortfall represents a massive opportunity for student housing-focused co-living operators. By 2030, this unmet demand is expected to become even more prominent as more students relocate to cities for higher education in engineering, medical, management, and arts streams. There is an urgent need for purpose-built student accommodations (PBSAs) that offer not just a bed, but a holistic living experience—including WiFi, security, housekeeping, food services, study areas, and recreational zones.

FY22 data suggests that traditional college hostels and university accommodations are increasingly inadequate to serve the growing student base. With only 33% of student accommodation demand currently being met, it opens the door for innovative and scalable co-living models targeted specifically at the education segment.

Investment Momentum and Policy Support

The sector’s strong fundamentals and clear growth trajectory are expected to drive greater investments from institutional investors, private equity players, and real estate developers. Operators like Stanza Living, ZoloStays, Your-Space, and NestAway have already attracted significant funding rounds and are rapidly scaling operations.

Moreover, the government’s push for urban housing, including rental housing policies and incentives under the Model Tenancy Act, is expected to offer regulatory support for co-living businesses. Cities like Bengaluru, Pune, Hyderabad, and Gurugram are anticipated to lead the adoption curve, given their large base of working millennials and tech graduates.

Key Factors Driving Co-living Growth in India:

1. Urbanisation & Migration: Continued influx of youth into urban centres for work and education.

2. Affordability: Co-living offers lower entry and monthly costs than traditional rentals.

3. Convenience: Ready-to-move-in, all-inclusive packages appeal to mobile populations.

4. Professional Management: Organised operators bring quality, safety, and standardisation.

5. Digitisation: Platforms offering online booking, rent payments, and service requests.

6. Changing Preferences: Rise in nuclear households and preference for shared experiences.

Challenges and the Way Forward

Despite the promising growth, the co-living sector faces certain challenges:

• Zoning regulations often do not clearly classify co-living properties, causing approval delays.

• Local resistance in residential areas due to perceptions around shared housing models.

• Operational challenges around managing high churn rates and maintaining occupancy levels.

• Standardisation issues, especially among smaller, unorganised operators.

To unlock its full potential, stakeholders suggest:

• Establishing clear policy frameworks and zoning regulations tailored for co-living.

• Offering tax incentives and funding support for student housing developers.

• Integrating sustainability and green building practices into co-living designs.

• Leveraging technology platforms for tenant management, grievance redressal, and predictive occupancy analytics.

In essence, India’s co-living market stands at an inflection point. As the country prepares for the next wave of urban expansion and demographic shifts, co-living presents itself as a resilient and scalable solution to India’s housing needs. With one million beds projected by 2030, and a Rs. 20,000 crore market size within reach, the sector is bound to play a pivotal role in shaping the future of urban living in India.

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