The average new free-standing house built in Australia over the 2018/19 financial year was just 228.8 square metres, according to research commissioned by CommSec.

This is down 1.3% from the previous year, and is the smallest new house size since 2001/02.

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In contrast, the average loan size for new owner-occupier homes is at an all-time high of over $450,000, according to the latest household lending data from the ABS.

But while the average new house shrank, the average Aussie apartment grew 3.2% over the year to 128.8 square metres.

This helped lift the overall average size of Aussie homes (houses and apartments) by 1.2 square metres to 189 square metres – up from its 22-year low of 187.8 square metres.

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According to the report’s authors, CommSec Economists Craig James and Ryan Felsman, Aussie home buyers have embraced apartments and smaller houses on smaller lot sizes over the past few years.

“Seven years ago, Aussies were building the biggest detached houses in the world,” the report said.

“There are still McMansions being built, but there are fewer of them. Now houses being built in the US are the biggest in the world, around five per cent bigger than in Australia.”

New US houses built in the last calendar year were 240.4 square metres on average, 11.6 square metres larger than Australia’s average.

Including apartments, the average US home was 201.8 square metres in size, 12.8 square metres larger (or roughly 6%) than the average Australian home.

The report noted that after the US, Australian homes are the second biggest in the world, and are still around 25% bigger than 30 years ago.

“Not only are houses far bigger than those built in the 1980s and before, but the standard of fit-out today is far superior with higher quality kitchens, bathrooms, floor coverings and inclusions like air-conditioners,” the report said.

Across the states and territories, the biggest houses were built in the ACT, with an average floor area of 250.8 square metres, ahead of Victoria (246.0), Western Australia (225.3), and Queensland (223.0).

Tasmania had the smallest new houses, averaging 178.5 square metres in size.

In complete contrast, the largest new apartments were built in Tasmania (159.3 square metres) while the ACT is where the smallest new apartments were built (102 square metres).

While the ACT built the largest houses, these free-standing or detached houses only made up 21% of all homes built in the state in 2018/19.

By comparison, 75% of homes built in Western Australia were free-standing.

The report said there is an ongoing need for a greater number of smaller homes to be built in Australia, given the rising population and the smaller average number of people in homes.

“An increasing proportion of Australians – especially in Sydney and Canberra – want smaller homes like apartments, semi-detached homes and townhouses,” it noted.

“As a result, the average home size has been falling over the past decade. Generation Y, Millennials, down-sizers and small families want to live closer to work, cafes, restaurants, shopping and airports and have been giving up living space for better proximity to the desirable amenities.

“Clearly the changes in housing demand and supply, and the differences across the country, have major implications for builders, developers, investors, building material companies, financiers and all levels of Government.”

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