Housing Group Says Australia Is Overlooking a Third Path to Home Security

A housing group based in South Australia has called on the Australian government to add cooperatives to its long-term housing plan.

A house under construction stands in front of newly built homes at a housing development in Sydney, Australia, on Feb. 20, 2025. David Gray/AFP via Getty Images

With many Australians tired of renting but falling short of buying a home, a housing organisation has suggested a third solution to the nation’s housing woes.

Representatives from Common Equity Housing South Australia group met with the Select Committee on Intergenerational Housing Inequity in Canberra on June 17 to discuss the merits of co-operative housing—a system that sits somewhere between renting and buying.

According to the Australian government, home ownership among younger Australians is in steep decline, with younger generations increasingly likely to rent rather than own their homes.

At the same time, house prices have skyrocketed. From 2011–24, the median cost of an Australian home more than doubled from $486,900 to $995,600.

Common Equity Housing South Australia general manager of corporate services Georgina Leader told the hearing there was a portion of society that was caught between two worlds.

“There is a significant and growing cohort of moderate-income households whose needs are not adequately addressed by either public housing or the private market,” she said.

Social housing tends to cater to the most vulnerable in society, while those with higher incomes generally have fewer barriers to purchasing homes, she noted.

In a housing cooperative, residents often manage the housing themselves, paying below-market rents or purchasing limited-equity stakes. While the housing types vary, from units to free-standing homes, tenure is often more secure than in standard private rentals. However, those leaving the style of housing are typically unable to sell the property or realise a capital gain.

While cooperative housing accounts for up to 40 percent of homes in some European countries, the committee heard that in Australia, the figure remains below one percent.

Common Equity Housing South Australia CEO Anne Gawen said a lack of public awareness and rigid regulatory frameworks, which are primarily designed for community housing, stifle the sector.

“People don’t actually understand what it is, they think it’s similar to community housing, but it’s not,” Gawen said.

“It’s quite a different model, and of course, all the regulatory requirements have been set up for community housing, so that makes it very hard for co-ops to still function.”

Gawen, whose organisation supports 11 housing cooperatives encompassing 190 properties, says the system is more socially sustainable than public housing because it fosters community connection.

“I visited 10 of our coop members yesterday, and their houses were very small, but absolutely beautiful,” she said.

“The gardens were beautiful, the connections with their neighbours, their faces glowed, and they talked about how cooperative housing had changed their lives. They’re a part of a community. We have some issues sometimes, but we talk them through. We’ve got structures, we have frameworks to deal with that.”

Gawen acknowledged it could be difficult to acquire funding for the housing model because governments generally preferred large-scale projects with substantial financial backing.

Cooperatives tend to vary in their funding sources, with gifted land, bank loans and government grants all in the mix.

“Despite decades of success in this model internationally, the question isn’t whether housing co-ops work. The question is, why has Australia never really scaled them?” she said.

With around 200 people currently on a waiting list for South Australian cooperative housing, Gawen said the organisation is limited in supply.

“To be clear, we don’t push it because we don’t have the houses, so we don’t want to set people up to come and live nowhere,” Gawen said.

The organisation called on the federal government to formally incorporate the model into its national housing plan.

Burnout, Confusion in Cooperative Model: Study

Experts, however, warn that there are a number of potential downsides among the potential positives of the cooperative model.

In a Western Sydney University study, a group of experts including Professor Louise Crabtree-Hayes pointed to examples from the United States where cooperatives had led to negative social outcomes and an overreliance on community leaders who could eventually suffer burnout due to the constant demands.

The report also highlighted the hurdle of needing organised groups before housing could eventuate, limited incentives for developers, complicated governance, and a lack of solid policy.

Based on examples from cooperative housing in Canada, the study also found costs were not necessarily low.

“While the cooperative housing stock was considered affordable, housing costs exceeded 30 percent of income for more than 50 percent of cooperative residents,” the report states.

A study of the Canadian system also found cooperatives were more likely than other forms of housing to run into financial trouble, primarily due to market and stock conditions and management issues.

The study concluded that the diverse range of international models further contributed to a lack of clarity and potential policy direction in Australia.