Australians are building smaller new homes

The average size of a new home is the smallest in 20 years as apartments shrink and fewer McMansions are built.

Generation Y, millennial couples and small families want to live closer to work and cafes, says CommSec’s Craig James

New homes are on average the smallest they have been for 20 years as builders focus on apartments rather than detached houses. But detached houses that do get built are the biggest they have been in four years, according to the CommSec Home Size Trends ­Report.

The trend to apartment living comes as housing prices have risen sharply on the eastern seaboard — up 74 per cent since early 2012, ­according to CoreLogic — leading some first-time buyers to choose units for affordability.

Some empty-nesters have also taken advantage of the rising value of their family homes and downsizes into high-end apartments.

But there have been concerns of an oversupply of investor-grade shoebox apartments in inner-city pockets of Melbourne and Brisbane, as distinct from those ­designed for owner-occupiers.

The average size of a new home fell 2.7 per cent over 2016-17 to 189.8sq m, according to the report, which relied on Australian Bureau of Statistics figures.

The changing shape of Aussie homes.

Apartments grew 2.3 per cent smaller at 128.3sq m, with CommSec suggesting a shift to smaller apartments meant more of them might need to be built to house a growing population.

“Generation Y, millennial 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 these desirable amen­ities,” CommSec chief economist Craig James said.

A higher proportion of apartments were built, making up 47 per cent of all new homes compared with 27 per cent seven years ago. But the average house was 1.2 per cent bigger at 233.3sq m.

“Aussies are still building some of the biggest detached (freestanding) houses in the world,” Mr James said. “There are still McMansions being built, but there are fewer of them.”

New houses are not only larger than they were in the 1980s but have better fit-outs and extras such as air conditioners, he said.

Real estate auction rates graphic

Australian homes are outranked in size only by the US at 245sq m, and slightly outpace New Zealand at 178.3sq m. By comparison, residents of Hong Kong make do with new homes of just 43.6sq m on average.

Victorians build the largest houses at an average size of 242.8sq m, compared with those in Western Australia (242.5sq m), NSW (230sq m) and Queensland (227.3sq m). The smallest new houses are in Tasmania (195.5sq m) and the ACT (197sq m). Homes have also been getting bigger when measured by bedrooms, with almost a third of homes having four bedrooms or more in last year’s census compared with only one in six 20 years ago.