Australian house sizes are increasing, led by the ACT: CommSec report

New Australian houses are getting bigger after years of shrinking amid a widespread rethink of living arrangements prompted by the pandemic, and the ACT is leading the charge with the biggest houses in the country, new research shows.

The average size of a newly built house in Australia in 2019-20 is 235.8 square metres, up 2.9 per cent year-on-year. This is the biggest yearly increase in 11 years, according to the CommSec Home Size Trends Report released today.

Newly built apartments also increased in size, with the average new apartment hitting a decade-high of 136.8 square metres, up 6 per cent year-on-year.

Australia was building the biggest houses in the world, ahead of the US, the report found.

CommSec chief economist Craig James said in recent years home buyers had been building progressively smaller houses on average, noting that during 2018-19, the average house built was the smallest in 17 years.

“So while Aussies built bigger homes over the past year, the big question is whether the decade-long downtrend in home size has ended. And COVID-19 may play a big role in answering that question,” Mr James said.

“Government-imposed lockdowns in response to the COVID-19 virus have prompted more Aussies to re-assess their housing needs.”

With more people swapping their office in the city for an at-home set-up, people were looking for bigger houses that could cater to both personal leisure and work activities, Mr James said.

The CommSec report also showed that ACT houses were still the biggest in the country at 256.3 square metres, followed by Victoria at 250.3 square metres and NSW at 235 square metres.

The biggest apartments and townhouses can be found in Victoria at 155 square metres; followed by Western Australia at 150.5 square metres and South Australia at 149.8 square metres.

AMP Capital chief economist Shane Oliver said the demand for inner-city apartments had now shifted, as had the construction industry, with more people looking towards areas on the fringes of the city or regional areas.

“I suspect that the demand and trend of building big homes will continue,” he said.

“In recent years, we saw a big surge in Australia’s construction industry being driven by new units and we saw that across our city skylines with the hovering cranes.

“Now we’re seeing that construction industry more in the suburbs. We can see by the building approval figures that the bulk of that pick-up was for houses and obviously that’s facilitated by the HomeBuilder grant.”

Dr Oliver added that people vacating their inner-city homes would lead to downward pressure on prices, therefore making room for first-home buyers to enter the market.

Buyers agent Claire Corby of Capital Buyers Agency in Canberra said a shift in buyer preference had seen buyers look for a home on a bigger slice of land.

“Home this year, and perhaps for the future … needs to serve many masters,” Ms Corby said.

“What used to be our place of relaxation after a long day is now also required to transform into an ergonomic workplace – a little laptop on the dining room table isn’t going to cut it.”

As more people opt to move from the city, this may see implications for builders, housing fit-outs and electrical stores.

“The trends in home size have enormous implications for retailers and builders. It is also clear that a raft of government agencies and businesses, especially those that are reliant upon or housing-focused, will need to be agile in monitoring the new housing trends,” Mr James said.