South Australia is changing the way we think about suburban living. With the introduction of new planning laws under the “Future Living” initiative, co-located housing is now a legal and encouraged form of development in select council areas. For homeowners, renters, buyers and investors, this opens the door to new possibilities.
Co-located housing offers a new way to create smaller, more flexible homes in established suburbs, without sacrificing street character or liveability. Here’s a simple breakdown of what’s changing, why it matters, and how it could impact different people across the property market.
What is co-located housing?
Co-located housing is a planning model that allows multiple small homes to be built on a single residential block, sharing land and open space. Unlike a traditional subdivision, the original house is kept and integrated into the new design. Additional dwellings are added behind or beside it, and the open space is shared communally.
Each dwelling is self-contained and can be separately owned, thanks to a community title structure. These homes are designed to be low-rise and small-scale, blending into the neighbourhood while creating more housing diversity.
Why South Australia is making the change to co-located housing
The SA Government is responding to two major housing trends: affordability pressure and changing household needs. Many people, especially older residents and smaller households, are living in large homes on large blocks that no longer suit them. At the same time, new buyers and renters are struggling to find affordable options in well-located areas.
Rather than relying solely on high-density developments, the Future Living initiative allows more subtle infill, adding homes without changing the essential look and feel of the street. It’s a way to unlock space in existing suburbs, without sacrificing greenery, character or community.
How the new rules work
The new laws are part of a planning update called the Co-located Housing Overlay, now included in South Australia’s Planning and Design Code. This overlay permits co-located housing in specific zones, with clear rules about how these developments must be designed.
Some key features include:
- The original house stays in place and is renovated or adapted
- One or two new dwellings can be built on the same allotment
- Homes share a central open space, with at least 24 square metres per dwelling
- Off-street parking is required (more for homes with 3+ bedrooms)
- All homes are titled under a community scheme, allowing individual sale
Initially, this policy is being rolled out in parts of Unley, Burnside, Prospect, Campbelltown, Walkerville and Alexandrina councils. Other councils may adopt it in future.
What this means for different people
Homeowners & downsizers
This is a big opportunity for people who want to stay in their neighbourhood but no longer need a large home. You might keep your existing house, build a smaller one for yourself at the back, and sell or rent the front one. It’s a smart way to unlock equity and stay connected to your community.
It also suits families wanting to live closer together, think parents building a home for adult children or elderly relatives on the same block.
Home buyers & renters
Co-located housing creates new buying and renting options in areas that don’t usually have them. Smaller, more affordable homes in suburbs with good schools, transport and amenities means more people can live where they want to, not just where they can afford.
Shared green space and a sense of community could also appeal to those who want something in between an apartment and a traditional house.
Investors
For investors, co-located housing is a new way to add value to well-located land. Rather than demolishing a home to subdivide, investors can add one or two dwellings to the existing property and either sell them or rent them out individually.
Working with a knowledgeable property manager helps ensure co-located housing is well maintained and legally compliant if used as a rental. It also makes ongoing management of community-titled properties much simpler.
The introduction of co-located housing in South Australia is a smart shift in how we use land, and it’s one that recognises the diverse ways people want to live today.
It won’t suit every block, or every buyer, but it offers a flexible, low-impact way to provide more homes without overdeveloping our suburbs.
As councils begin rolling it out, we’ll continue exploring what this means for investors, homeowners and tenants alike, stay tuned for more in this series.
Disclaimer: This article is general in nature and does not constitute financial or legal advice. Please speak to a qualified financial advisor or accountant before making investment decisions.