No Comments

Compact Homes –new trend in Australian housing market

Compact Homes –new trend in Australian housing market


When it comes to buying homes in Sydney, Melbourne and Brisbane in Australia, ‘Small is nice’ is the new buzzword with several Aussie home-buyers and investors.With the ever-increasing pricing of housing in Sydney, Melbourne and Brisbane, buying a large house with big land area is not a suitable option for several new home buyers and investors. Large land area and construction cost of extra built-up area makes the property very expensive and un-affordable for the buyers. With bankers and lender tightening their coffers for housing finance, it is becoming more difficult for the new buyers and investors to avail loans for expensive properties. Contrary to this, taking a small loan and paying up the monthly re-payment on affordable property is easier and workable, with less burden on purchasers.

The new age buyers in Australia are less focused on size and look for homes in locations closer to or well-connected to their workplaces, shopping, education and medical facilities so that their daily commute is reduced and work-life balance is maintained. Compact homes are also low on maintenance and are invariably very budget-friendly in all respects.

On the back of prevailing market sentiment and many house buyers / investors looking to shy away from heavy investment in property market presently,compact or smaller homes with affordable pricing are much safer and feasible options. House sizes in major Australian citieshave alreadystarted shrinking as developers and builders are increasingly building affordable priced homes for which the demand is currently very high. Smaller units, apartments, townhouses, villas and compact houses with smaller land sizes are coming up in most of the city areas and suburbs in Australia, paving way for more space usability, multi-functional and efficient planning of houses.

  • Housing Industry Association figures show the average size of a home has condensed over the past five years as builders grapple with skyrocketing land prices and rampant population growth.
  • The average floor size of an Australian home (houses and apartments) has fallen to a 20-year low. Data commissioned by CommSec from the Australian Bureau of Statistics shows the average new home size is 189.8 square metres, down 2.7 per cent over the past year and the smallest since 1997.
  • HIA development analyst Kristin Brookfield said the average floor space of Sydney homes has been decreasing because fewer families could afford large homes following a $170,000-odd jump in the median house price over the past three years.
  • The smaller home size reflects the increased building of apartments (around half of all new building is apartments). Apart from increasing percentage of apartments, compact houses like town-houses, villas, row houses and terrace houses are also being offered in various markets.
  • Councils have also made it easier for builders to construct smaller dwellings by increasing density regulations.


Price points play a big role in sale of houses today, and the entire eco-system currently revolves around the first-home-buyers looking to buy affordable homes to avail the government rebates on Stamp Duty and FHOG. With most of these rebates are on under $600,000 house price, or part rebate on upto $850,000, the developers and builders doing their best to bring some of their offerings within this price range.

This phenomenon of shrinking house sizes is most pronounced in Sydney, where property prices are the highest.According to a report, a standard Sydney property has gone from 312 square meters in 2010 to 285 square meters, a reduction of 27 square meter floor area. Forecasts suggest properties will continue to get smaller in cities like Sydney as scarcity of land resulting in higher prices.While we can see this trend gradually transferring to other cities of Australia as well, Sydney is the most land constrained city where the only alternatives for budget constrained homebuyers are in the distant outer suburbs of north-western and south-western regions.

However, since infrastructure developments in such distant areas is relatively slow and it will take time for the amenities to develop, most families are looking at townhouse or apartments at relatively developed areas, which have good infrastructure amenities like public transport, schools, shopping and entertainment avenues.

Other cities like Melbourne and Brisbane are also following suit, however, one can still get large houses and apartments in some areas or suburbs. In most cities, many working couples have changed their long term plans of owning a quarter-acre block to a compact but more city location primarily for two reasons ­ 1. they can’t afford a house that big a size without it being more than an hour commute from the CBD, 2. Lack of infrastructure and other amenities does not make suburban areas more livable for present day families who want to be closer to their jobs, friends and families.

Clearly, generation Y, millennials, couples and small families want to live closer to work, cafes, restaurants, shopping and public transport, and are ready to giveaway living space for better proximity to the desirable amenities.


Comments (0)