According to new research, builders are reacting to falling property prices and more cost-conscious buyers, by reducing the sizes of standard housing blocks as well as sizes of houses constructed for sale.
Stockland, Australia’s biggest listed home builder, has cut the average size of it’s housing lots in it’s house-and-land packages by almost 20 per cent – to 481sq m – over the past three years.
And Australand Property Group is also redesigning its standard range of homes to make them smaller, thereby reducing the costs of construction.
Peet, which has 70 housing estates, is building on smaller lots, with shared outdoor entertining areas to ensure quality of living is maintained.
Price hikes for land and materials and wage and tax rises are driving up costs of residential construction.
Home prices in the eight capital cities dropped 4 per cent in the year to October, according to RP Data – the biggest fall since the real estate researcher began compiling the figures in 1999.
“There’s a housing affordability crisis in Australia, and one way of keeping the property price point more affordable is reducing their sizes. This makes properties cheaper and easier for purchasers to qualify for home loans.
In pursuing the “great Australian dream” of home ownership – and the increasingly rare quarter-acre block – households have doubled their level of debt as a proportion of disposable income in the past 15 years to 154 per cent, according to Reserve Bank figures.
That eclipses the 133 per cent ratio Americans reached at the peak of the US sub-prime mortgage boom.
Stockland general manager for Victoria, Andrew Whitson, said the group had decided to build smaller homes closer to public spaces rather than homes with big backyards.