Rooming and boarding houses have experienced significant growth in both supply and demand over the past five years in New South Wales.
This article examines the factors driving the expansion of the rooming house market, why investors consider rooming houses an attractive asset class, why tenants are increasingly choosing this form of accommodation over traditional residential rentals, and the impact this trend is having on the broader housing market.
Housing and Cost of living pressures
One of the key reasons for the increasing supply of rooming houses is the rising cost of rental accommodation across New South Wales. For example, the median weekly rent in New South Wales reached $650 per week, representing an increase of 73.8% between April 2019 and April 2025. Coupled with broader economic pressures, including elevated inflation and ongoing geopolitical uncertainty affecting global markets, many Australians are finding it increasingly difficult to afford traditional rental housing.
Rooming houses provide a more affordable housing option, particularly for individuals living alone, a demographic that the Australian Bureau of Statistics predicts will continue to grow. Depending on the age of the property and whether accommodation is furnished, weekly rents for individual rooms typically range from $200 to $500 and usually fully furnished, all utilities inclusive rental option, making rooming houses a more affordable alternative to conventional residential rentals.
From Repurposed Housing to Purpose-Built
In recent years, the rooming house market has evolved from predominantly repurposing existing dwellings into rooming accommodation to the construction of purpose-built facilities. This shift has resulted in properties specifically designed to accommodate multiple tenants while enhancing privacy and amenity. A clear example of this trend is the inclusion of private bathrooms and kitchenettes in many modern rooming houses, replacing the shared amenities commonly found in older developments. As a result, contemporary rooming houses generally offer a superior standard of fit-out, functionality, and overall quality. These improvements have broadened the appeal of rooming houses and attracted a wider range of tenants.
FIFO and DIDO Demand
Fly-in-fly-out (FIFO) and drive-in-drive-out (DIDO) workers are another growing source of demand. As these arrangements become more common, some employers are choosing to lease rooming house accommodation for interstate staff, favouring the greater comfort it offers over a standard truck stop.
Housing Shortage and Migration Pressure
Australia’s ongoing housing shortage is compounding demand for all forms of accommodation, rooming houses included. Housing Industry Association estimates suggesting a shortfall of more than 250,000 homes nationwide. When combined with net overseas migration of approximately 306,000 people in 2025, the demand for housing continues to increase. While rooming houses are not a complete solution to Australia's housing challenges, they provide an alternative form of accommodation by allowing multiple tenants to occupy a single dwelling, thereby increasing housing capacity relative to traditional residential properties.
Interstate migration has also had an impact on the Rooming House market. Since the Covid-19 pandemic Australia has seen an increase in interstate travel especially people moving from metropolitan areas to regional locations. Rooming Houses offer an efficient and easy option for people wanting to make this move as majority of them come fully furnished and with an all-utility inclusive rental option.
Compelling for Investors
Rooming houses are also attracting investor interest in their own right. Assets in central locations close to amenities tend to record low vacancy rates, which investors generally read as a sign of lower risk and more consistent income.
- Net yields in metropolitan NSW rooming houses typically range from 4% to 7%
- Regional NSW markets generally achieve net yields between 7% and 10%
Rooming houses are no longer a fringe accommodation type. They are emerging as an affordable, efficient, and investor-friendly accommodation option and an increasingly important segment of the NSW residential market. With rising housing costs, increasing demand for flexible living arrangements, and attractive investment fundamentals, expect this segment to keep growing, with more purpose-built product entering the market as it matures.