McMansions no more as cost puts the squeeze on homes

by | Sep 26, 2016 | property

This article was first published by TURI CONDON, PAIGE TAYLOR via theaustralian.com.au | Image: Large houses under construction at Tranmere SA. Photo: Winburn Leigh


The days of the McMansion are numbered, with the size of Aus­tralian homes shrinking over the past seven years, victims of soaring costs and changing lifestyles.

The country’s homes — some of the biggest in the world — reached peak size in 2009 at an ­average of 222sq m for newly built houses and apartments combined, according to research under­taken exclusively for The Weekend ­Australian.


But the global financial crisis ­put paid to that. The average new home now stands at 192sq m, making it smaller than in 2001, senior KPMG analyst Simon Kuestenmacher found in an analysis of 15 years of data from the Australian Bureau of Statistics.


“Market pressures, a shift in values to ‘less is more’ and spending on experiences rather than material goods, especially among Gen Y, has put Australia on a trajectory towards smaller homes,” Kuestenmacher noted.


Despite the contraction, Australian houses are still big on a ­global scale. “A new house, on ­average, has more cars and more TVs than it does children,” says Stephen Conry, chief executive of global property firm JLL, adding that managing the expectations of young buyers will increasingly ­become an issue.


“The early-30s cohort often don’t want to build a house in the outer suburbs, they want to live near the city,’’ Mr Conry said. “But to do so they need help from ­others, usually their parents. Their expectation is far different from one or two generations ago.”


Surging house prices and traffic congestion as influences of where people live are crashing up against lifestyle and aspiration.


A well-planned city underpinned affordability, economic prosperity and quality of life, ­according to Property Council president and Stockland chief executive Mark Steinert.

“If you don’t think about the streetscape in a human scale … (if development) is not well done, it can take hundreds of years to ­repair,” Mr Steinert said.
The wave of apartment building has contributed to the overall fall in home size, but standalone houses are also shrinking, from 249sq m in 2009 to 223sq m by early this year. Apartments peaked in 2009 at 152sq m, dipped to 124sq m in 2013, but bounced back to 135sq m this year as a wave of small units favoured by ­investors gave way to bigger apartments targeted at young families who could not longer afford ­increasingly ­expensive houses.


Patterns diverge across the country, with Perth’s homes riding the mining boom and shrinking as the state’s fortunes fell, while Sydney’s homes peaked in 2012 and have been falling as prices surged. Melbourne’s home size has been waning since 2009 and Brisbane home sizes rebounded last year after falling since 2006.

In Perth, Kelly and Davie Phillips dropped their plans to build a big house in Butler, 40km north of Perth, and instead built a compact, four-bedroom home on a smaller block closer to the sea in the new suburb of Alkimos Beach, which was created in 2013 by Lendlease and LandCorp.


With 180sq m of living space on a 420sq m block, the home they designed for themselves and daughter Maddie, 11, is far from tiny, but it is in keeping with the ­national trend away from sprawling homes. “We are very lucky,” Ms Phillips said. “We looked for a block for a long time but we didn’t look at beach suburbs because we thought we couldn’t afford it. It turns out we could, but on a smaller site.”