Australians building ‘fewer McMansions’ as average home size hits 22-year low

Australian homes have shrunk to 22-year lows as the “McMansion” fades in popularity and more apartments are built.

Australian homes have shrunk to 22-year lows as the “McMansion” fades in popularity and more apartments are built, Australian Bureau of Statistics data reveals.

The average floor size of a new home is now 186.3 square metres, down 1.6 per cent over the past 12 months and the smallest since 1996, according to CommSec’s Home Size Trends Report released on Monday.

Australians are still building the second-biggest freestanding houses in the world behind the US at an average of 230.8 square metres, although this was down 0.9 per cent over the year. Apartments, which now account for around half of all new dwellings, fell in size by 2.7 per cent to an average of 124.8 square metres in 2017-18.

“There are still McMansions being built, but there are fewer of them. The smaller home size reflects the increased building of apartments,” CommSec chief economist Craig James said in the report.

“Generation Y, Millennials, couples and small families want to live closer to work, cafes, restaurants, shopping and airports, and are giving up living space for better proximity to the desirable amenities.”

The average size of freestanding houses peaked in 2011-12 and has stabilised over the past five years. The average house is 8 per cent bigger than 20 years ago and nearly 30 per cent bigger than 30 years ago in 1987-88.

The standard fit-out is also superior, with higher quality kitchens, bathrooms, floor coverings and inclusions such as air-conditioners.

“The changes in housing demand and supply and the differences across the country have major implications for builders, developers, investors, building material companies, financiers and all levels of government,” Mr James said.

The average American home, including houses and apartments, was 202 square metres last year, around 8 per cent bigger than Australia, while in New Zealand the average home was 172.1 square metres, around 8 per cent smaller.

Victorians are building the biggest freestanding houses in Australia at 244.8 square metres while the Northern Territory has the smallest at 181.8 square metres. Conversely, the Northern Territory has the biggest apartments at 136.5 square metres while NSW has the smallest at 116.5 square metres.

“It is important to note that there are differences in house size across Australia. In the past year the average size of houses built in Victoria, Queensland and the ACT has lifted,” Mr James said.

“In fact in 2017-18 Victoria built the biggest houses in six years. And on average ACT houses built in 2017-18 were the biggest in nine years. But the average new freestanding house built in NSW was the smallest in 23 years and 11 per cent smaller than Victoria.”

Meanwhile, apartments are shrinking — from around 140 square metres between 2004-2010 to just under 125 square metres today — and we’re building more of them. Eight years ago 27 per of new homes built were apartments. Today, that figure is 46 per cent.

As average home sizes decrease, the number of people per household has also started to fall again. In 1911 there was an average of 4.5 people in every home, falling consistently each Census to 2.4 people in 2006.

Then between 2006-2013, that figure started to rise again. “At face value, the modest increase in average household size may not seem significant,” Mr James said.

“But it was the first increase in household size — and as a consequence, the average number of people in Australian homes — in at least a century. Children were staying home longer with their parents — no doubt the cost of homes and rising rents being key influences.”

But since 2014, the number of people per dwelling has been falling. “Lower interest rates and the increased supply of cheaper apartments and town houses have prompted older couples to downsize,” Mr James said.

“And more Generation Y/Millennials have been moving out of home and renting or taking ownership of accommodation more appropriate to their needs.”

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