Why are we building the biggest homes in the world?

New Australian houses are the biggest in the world according to a new Commsec report.

New houses in the ACT are on average the biggest in Australia while Victoria builds the biggest apartments

But while the average size of new houses fell in Australia over the past year, the average size of new apartments has lifted over the past 18 months.

But the jury is out on whether the trend will be maintained.

CommSec commissioned the Australian Bureau of Statistics (ABS) to supply data on the average floor area of new homes built in Australia.

Here are the key findings of their report:

After posting the biggest increase in 11 years during 2019/20, homes built nationally over 2020/21 were – on average – slightly smaller than the previous year.
Apartments were bigger while detached houses were slightly smaller.
The Covid-driven desire for extra living space may have been reflected in bigger apartments being built.
The average new apartment completed in 2020/21 was at an 11-year high of 138.3m², up 0.4 per cent over the year.
By comparison, the average free-standing house completed in 2020/21 was 229.3m², down 2.9 per cent from 7-year highs.
And the average new home (houses and apartments) completed over 2020/21 was 195.8 square metres, down 0.4 per cent from the 6-year high set in 2019/20.
Queensland was notable for building bigger detached houses and apartments over 2020/21.
In fact, the average new home in Queensland (houses and apartments) was up 5.5 per cent to an 8-year high of 205.8 m².

Here is the balance of the Commsec report

In 2020/21 the biggest new houses were built in the ACT (259.3m²); the biggest apartments were in Victoria (156.8m²), and the biggest overall homes (houses and apartments) were in Western Australia (214.8 m²).

Data also confirmed that Australia and the US continue to build the biggest homes in the world.

But importantly in both countries the average size of new homes completed fell over the past year.

In the US, the average new home completed was 2,066 square feet or 192m², around 2 per cent smaller than the average Australian home.

But the measuring methodology differs slightly between the two countries.

However, based on the available survey evidence, new homes being built in Australia and the US are still notably bigger than in other countries.

Analysis of findings

Back in 2009/10 Australians were building the biggest homes that they had ever built.

The size of the average home peaked at 218.6m², 46 per cent bigger than in the mid-1980s.

Interestingly the size of US homes peaked around the same time (in fact, two years earlier).

After falling from 2010 to 2012, home size in both the US and Australia broadly trended sideways in the past eight years.

And while homes haven’t been getting much bigger in recent years, they are still notably larger than those built by previous generations.

The average Australian free-standing house is 24 per cent bigger than the house built 30 years ago with new homes (includes apartments) 14 per cent bigger.

The size of the average house in both Australia and the US has been falling from highs for various reasons: the increased focus on sustainability; desire for low-maintenance homes; smaller lot sizes; fewer people per home; affordability; a desire for proximity to inner cities; and energy costs.

But after hitting 22-year lows in 2018, home size lifted before since stabilising.

The average home size lifted 3.4 per cent in 2019/20 – the biggest increase in 23 years – before consolidating (down just 0.4 per cent) in 2020/21.

While quarterly data is more volatile, national home size hit a 7-year high of 201m² in June quarter 2020 and stood at 200m² in the December quarter.

Apartment size and house size also spiked higher in the June quarter, especially apartments.

Apartment size spiked to 146 m² in June quarter 2020 – a record high in the 10 years of available quarterly records and a result on par with the high set 17 years ago for financial year records.

Covid-19 may have influenced the home size, although it is still relatively early days in the construction cycle.

The experience with Covid-19 has certainly caused more families to look for bigger homes and caused others to add extra rooms to existing homes.

More Aussies want to achieve a situation where family members are able to live, work and relax at home.

No doubt, builders and architects have been quick to respond to the new demands by families.

Prior to Covid-19, a higher proportion of Aussies had elected to live in apartments rather than detached houses.

At the same time, the average size of an apartment hit record lows in 2017/18.

The conclusion that many Aussies appear to have reached is that apartments became too small to be truly comfortable and practical.

New trends such as butler’s pantries, mudrooms (storage for boots, coats, and wet clothing), and home theatres have also given more families justification to build bigger homes.

There have been shifting trends in the sizes and styles of homes over the past decade and Covid-19 has been throwing another element into the mix.

The big question is whether Aussies continue to embrace working from home, opting to move away from apartments in, or near the CBD, in preference for a larger home in a regional or suburban ‘lifestyle’ area.

Or it may be just a case that bigger apartments will be sought – either close to capital cities or in the suburbs.

States & territories highlights

The ACT continues to build the biggest houses in Australia.
In 2020/21 the average floor area of a house built in the ACT was 259.3m²; ahead of Victoria (238.8m²); and Queensland (231.5m²).
The smallest new houses built in 2020/21 were in Tasmania (176.5m²).
In terms of “other dwellings” such as townhouses and apartments, the biggest dwellings can be found in Victoria (156.8m²) followed by South Australia (149.0m²) and Northern Territory (141.5m²).
The smallest ‘other dwellings’ can be found in Tasmania (91m²) and NSW (126.0m²).
Of all homes built in 2020/21, the average floor area was biggest in Western Australia (214.8m²) from Victoria (211.5m²).
In Tasmania, 91 per cent of homes built in 2020/21 were free-standing houses, followed by Western Australia (81 per cent); Northern Territory (78 per cent); South Australia (73 per cent); Queensland (68 per cent); Victoria 58 per cent); NSW (45 per cent) and the ACT (25 per cent).

Australia versus the US

All the available information points to the fact that the US and Australia are currently building the biggest homes on the planet.

There is some debate on whether the US or Australia builds the biggest homes.

The ABS includes garages in floor area calculations.

For many US cities inclusion of garages in floor area calculation is a moot point, especially in the regions where apartment buildings dominate.

But the ABS have suggested a garage may occupy between 18-36m².

Outlook & implications

The Commsec report concludes that around 18 months ago the world changed with Covid-19.

And the world is in the process of changing again as people learn to live with the virus.

In response to the virus, more people are working from home, in addition to the normal activities of eating, sleeping, and entertaining.

For some families, this has meant bigger homes were required.

In other cases, it has prompted a recalibration of space in the home.

The jury is out on whether some housing trends revert to pre-Covid times.

Over the past 18 months, Aussies shifted their preferences from small apartments to bigger apartments or detached houses.

And budding home builders and buyers have favoured regional areas and suburbs over cities.

Will those preferences change again?

It seems likely that more of us will be working from home at least part of the time with implications for central business districts (CBDs) of capital cities including office and retail space usage, cafes and restaurants, services such as hairdressers and public transport services.

How Aussies elect to live, work and play clearly has implications for home prices, home supply, and social and economic infrastructure demands (roads, schools, hospitals) in cities, outer suburbs, and regional areas.

It’s not just Covid, but also environmental considerations as well as power needs that have implications for home builders, trades, building materials, homeware stores, electrical stores, and housing fit-out businesses including kitchen and bathroom fixtures and fittings.

It is important to point out that there are still only around 2.5 people in the average home.

Homebuilders regularly seek to include 4 bedrooms on the architect plans, together with a master ensuite, walk-in-robes, butler’s pantry, home theatre room, formal study and/or study nook, mudroom, and alfresco dining.

Interestingly all this sits oddly with ‘green’ living credentials.

Source: Commsec Home Size Report

ALSO READ: Why you shouldn’t invest in shiny new houses or apartments

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