The average size of new homes is on the decrease, and they are now at their smallest level since 1996, new data from the ABS has revealed.
The data, commissioned from the Australian Bureau of Statistics by CommSec, revealed that the average floor size of Australian residential property, of both houses and apartments, is at 186.3 square metres, a decline of 1.6 per cent over the last year.
The shift towards the decline in home size, according to Craig James, chief economist at CommSec, is due to the rise of apartment building, which he claimed consists of approximately half of all new buildings.
The smallest average property can be found in the Northern Territory at 181.8 square metres. Tasmania offers the second smallest at 186.8 square metres.
Meanwhile, new Victorian houses have the biggest average at 244.8 square metres, followed by the ACT at 242.3 square metres, Western Australia at 235.3 square metres and then Queensland at 230.8 square metres.
Despite the decline in size, however, new houses are on average 8 per cent bigger than those built 20 years ago and nearly 30 per cent bigger than 30 years ago, according to CommSec analysis.
Due to the shift to smaller apartments, the analysis hypothesises that more supply could be expected to keep up with the demand for this shrinking property type.
It is not just property size that is falling; quarterly ABS data also showed that the number of people per dwelling has also been in decline.
The analysis stated that lower interest rates and an increased supply of cheaper apartments and town houses have caused older couples to downsize, while Millennials have been moving out of home and living closer to areas that suit their needs.
“Generation Y, Millennials, couples and small families want to live closer to work, cafes, restaurants, shopping and airports, and are giving up living space for better proximity to the desirable amenities,” Mr James said.
“If current trends continue, then clearly more homes can be built without resulting in oversupply conditions,” the report noted.
“In short, supply would merely be responding to stronger demand. The key point being that it is not just population but demographics and choice of accommodation driving demand.”