Canberrans building second-biggest houses in nation as Australian home sizes fall to 22-year low

Ian Bushnell 21 November 2018

The average floor area of a house built in the ACT was 242.3 m², behind Victoria (244.8m²).

Canberrans are only second to Victoria in building the biggest houses in Australia despite home sizes falling to a 22-year low nationwide due to the apartment boom, according to Commsec.

Data commissioned from the Australian Bureau of Statistics by CommSec shows that in 2017-18 the average floor area of a house built in the ACT was 242.3 m², second to Victoria (244.8m²) but ahead of Western Australia (235.3m²), and Queensland (230.8m²).

The data shows Australian homes (houses and apartments) built in the past financial year was 186.3 square metres, down 1.6 per cent over the past year and the smallest since 1996.

CommSec Chief Economist Craig James said the smaller home size reflected the increased building of apartments, with around half of all new construction in that category.

“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,” Mr James said.

But the average house built in 2017-2018 at 230.8 square metres, down 0.9 per cent on the year, was still 8 per cent bigger than 20 years ago and almost 30 per cent bigger than 30 years ago, although the size of the average house built in NSW fell to a 23-year low in the past year, according to the report.

Not only are Australian houses bigger than those built in the 1980s, but the standard of 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.

Australian homes are the second biggest in the world, behind the US, with US houses on average around 6 per cent bigger, and US homes (houses and apartments) 8 per cent bigger.

But the size of the average new house has stabilised over the past five years after peaking in size around six years ago. There are still McMansions being built, but there are fewer of them, says Commsec.

Commsec says that as more apartments are being built they are also becoming smaller in size. Through 2004-2010, the average apartment was around 140 square metres, while now it’s closer to 125 square metres.

In 2017-18 the average floor area of a new apartment in Australia (unit, townhouse, villa etc.) was 124.8m², down from 128.3m² in 2016-17 and 13 per cent below the high of 143.4m² in 2004-05.

Eight years ago around 27 per cent of all new homes being built were apartments, but now apartments account for 46 per cent of all homes built.

CommSec suggested the shift to smaller apartments might mean more of them need to be built to house the nation’s growing population.

The smallest new houses built were in the Northern Territory (181.8m²) and Tasmania (186.8m²). The biggest apartments could also be found in the Northern Territory at 136.5m².

Commsec says that with the proliferation of apartments and the average home size dropping, the number of people residing within any one household is also falling, after a slight rise from 2006 to 2013.

Since 2014 lower interest rates and the increased supply of cheaper apartments and townhouses compared with free-standing houses have prompted older couples to downsize, and more Generation Y / Millennials have been moving out of home and renting or buying.

“The question is whether household size continues to fall over the next few years or whether the higher home prices act to stall demand, again prompting greater co-habitation of dwellings,” the report says.


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