There is a question I keep coming back to when looking at the next generation of accommodation in Australia.

Are we genuinely seeing the emergence of a new institutional asset class called flexible living? Or are we simply becoming more creative about making the numbers work when a conventional hotel or residential development no longer does?

I suspect it is a bit of both.

And that is what makes this interesting.

For years, the property industry has been very good at putting people and buildings into categories. Hotel. Apartment. Serviced apartment. Student accommodation. Co living. Build to rent.

But people’s live do not fit nearly as neatly into those categories.

A tourist arriving in Sydney might stay for two nights. Someone relocating for a new job might need six weeks. An international student might stay for a year.

They are all looking for the same fundamental thing: somewhere to stay. The difference is simply how long they need it for, why they are there and what they are prepared to pay.

Is that hospitality or residential? The answer matters enormously to investors, lenders and valuers. It matters rather less to the person walking through the front door, and that disconnect is at the heart of what is happening in flexible living.

Follow the capital

The shift towards flexible living is often presented as individual sectors, build to rent, co living, student accommodation, gaining momentum. I think that misses the bigger picture.

Institutional capital is increasingly looking at living as a spectrum rather than a collection of separate asset classes, and capital that once sat firmly inside residential or hotel strategies is now looking across the boundaries between them. Not because investors have suddenly become more adventurous, but because the economics are making the old boundaries harder to defend.

The economics are forcing the conversation

I have spent more than two decades working across hospitality and real estate, and one lesson has stayed remarkably consistent: a great concept is not a great investment if the numbers do not stack.

Australia has become an increasingly difficult place to develop anything. Land is expensive, construction costs are high, skilled labour is constrained, and financing costs have moved sharply from the ultra low rate environment.

At the same time, we are not delivering enough accommodation of any kind to keep pace with demand, but building more of the same is not necessarily viable. The question becomes less about what asset class to build and more about what the land can support and how the economics work.

This is where flexible living becomes interesting. If the same building can serve different customers for different lengths of stay, the revenue profile can become more resilient: long stay income provides a base, medium term demand captures relocations, and short stays provide pricing upside. The building becomes less of a fixed product and more of an operating platform. That can create real value. It can also create a very expensive mess.

But let us not kid ourselves

Flexible is not automatically better. There is a danger that “flexible living” becomes another piece of industry language used to make a difficult development sound more sophisticated than it really is. A building that can theoretically serve everyone but economically serves nobody is not flexible. It is confused, and every additional customer segment brings real cost: different operating models, staffing, technology and distribution.

So the investment question should not be:

Is flexible living the next big thing?

It should be:

Does the value created by flexibility outweigh the cost and complexity of delivering it?

That is the question I would want to see in an investment committee paper.

Not the buzzword.

The maths.

The hotel question is particularly interesting

I do not believe the rise of flexible living means hotels are becoming less relevant. In fact, the opposite may be true. Australian hotel investment reached a record $2.7 billion in 2025, and new supply remains constrained by high development costs, financing conditions and competition from alternative uses.

The problem is not demand. It is development economics. At some point, a developer looking at a hotel feasibility has to ask whether the hotel actually represents the best use of the land. That is not an anti hotel argument, it is a real estate argument. Perhaps the answer is still a hotel, or extended stay, or co living. The mistake is assuming the answer before asking the question.

This is where House of Places comes in

House of Places was founded around a simple observation: some of the most interesting opportunities in real estate now sit between the traditional categories, between hospitality and living, and, perhaps most importantly, between what customers want and what capital markets have historically been comfortable funding.

That is the space I wanted to work in, not because every hotel should become co living or because flexible living is fashionable. The opportunity is to look at the whole equation together: what the customer needs, what the land supports, what the operator can deliver, and what risk capital and lenders will actually accept.

The bigger shift

I do not think institutional capital is abandoning hotels for flexible living. The evidence does not support that. Something more interesting is happening: capital is beginning to question the categories themselves.

For a long time, we have used asset classes as though they were characteristics of the building. They are not. They are frameworks we created to describe how a building is being used, operated and valued at a point in time. The building is still the building; what changes is the customer, the operator and the economics around it.

That does not mean every asset should do everything. Quite the opposite: the smartest assets make a few deliberate choices about where flexibility creates value. But it does suggest the next generation of institutional real estate will be less about defending old boundaries, and more about understanding where they no longer reflect how people actually live.

Perhaps the most interesting question is no longer “What asset class is this?”

Perhaps it is:

“What could this place become, and what would make that more valuable?”

That feels like a much more useful starting point.