As consumer priorities, economic challenges and a greater emphasis on efficient land use shift, overall, Australian homes are becoming more compact. While the days of ever-growing suburban homes are not yet over, increasingly, we are seeing a new trend: Australians are opting for smaller living spaces.

This transition is influenced by rising property prices, a preference for homes that fit within growing urban density, and a greater proportion of apartments in the overall dwelling mix. According to the Australian Bureau of Statistics (ABS), the average size of Australian dwellings has been on a steady, though modest, decline over the past 15 years.

Apartments and houses trending downwards

Data from the ABS Building Activity Survey, which includes responses from a wide range of builders and other industry stakeholders, confirms this shift. The figures span the full mix of residential property types – from detached houses to townhouses and high-rise apartments.

As the chart below indicates, the average floor area of new homes, including apartments and houses, has been trending downwards. Back in the 2008/09 financial year, the average Australian home peaked at 211m². Since then, despite recent consumer interest in larger dwellings due to work-from-home preferences and adult children staying longer with family, the overall footprint of new homes has continued to shrink – but not in all areas of the country.

The surge in apartment living largely is fuelling this movement. In fact, the shift toward apartments has been one of the most significant changes in Australian housing trends over the past 30 years. 

Large detached homes vs. first home buyers

Although the size of detached houses in Australia has marginally declined over recent years, it experienced a slight bump during the pandemic.

In 2022/23, detached homes comprised 64 per cent of all new dwelling completions, and various factors influenced their design. Rising land prices have steered the market towards larger detached homes, often chosen by second- or third-home buyers who can afford more space.

Meanwhile, first-home buyers are increasingly drawn to apartments closer to employment centres, leaving smaller detached homes behind.

Average size of a new detached house is 250m²

Other drivers include shrinking lot sizes, which limit the potential footprint for detached homes and drive a growing trend for two-storey constructions. Additionally, planning requirements often require attached garages within the main house footprint, which impacts average size calculations.

The result? Detached homes are no longer seeing a size boom as they once did, although the national average for a new detached house was 250m² as of March 2024, slightly below the figures for both 2019 and 2014.

As mentioned, the pandemic saw a temporary upswing in the size of Australian homes, largely as households sought additional space to support work, study and leisure needs. This appetite for extra room coincided with a significant migration from inner-city living to regional areas, a shift bolstered by supportive fiscal policies and a surge in detached home commencements. It remains uncertain, however, whether this trend is here to stay.

Where 70% of new homes are apartments

The impact of Australia’s growing preference for apartment living is evident in regions such as the ACT, where more than 70 per cent of new home constructions in 2022/23 were apartments. Detached homes in this region have grown in size in response, with the ACT now hosting the largest average floor areas for detached homes nationwide at 263m², notably above the national average of 238m².

In NSW, however, the average size of detached homes has trended downward over recent decades. Contributing factors include government taxes, regulatory costs, rising building material costs, and construction constraints on two-storey homes. Yet, during the pandemic, demand shifted back toward larger blocks in regional areas, briefly reversing this trend.

Key statistics: detached homes

Here’s a snapshot of the recent metrics on detached homes:

• In March 2024, the average floor area of detached homes across Australia settled at 250m², down from 255m² in March 2019 and level with 2014.
• Between 2008/09 and 2022/23, the average new detached home size declined by 3.4 per cent.
• In capital cities, the average was 246m² as of March 2024, a drop from 256m² in 2019 and similar to 250m² in 2014.
• Regional areas recorded an average of 254m² in March 2024, marking slight increases from both 2019 (253m²) and 2014 (247m²).
• Both NSW and Victoria have shown consistent declines in average detached home sizes, particularly over the last two to four years.

What's next for the apartment sector

The apartment sector illustrates a clear trend towards smaller floor areas despite accounting for 36 per cent of new dwelling completions in 2022/23. The average size of new apartments in Australia was just over 118m² in 2022/23, a slight drop from the 119m² average back in 2008/09. Between 2008/09 and 2022/23, the average floor area of a new apartment declined by 0.6 per cent.

This reduction underscores the broader shift in urban design, where density and affordability take precedence over living space. These trends reflect an evolving housing market where many Australians prioritise location and lifestyle over expansive layouts.

Not all residential types have seen a decline in size. Townhouses, terraces and row houses have bucked the trend, with their average floor areas increasing slightly over the years. Townhouses, in particular, hit an average of 174m² in 2022/23, a 16.9 per cent rise since 2008/09. According to the ABS, in 2022/23, the share of multi-units in overall dwelling completions, which includes townhouses was 36 per cent.

This upward movement suggests these mid-density dwellings are gaining popularity among families seeking more space than an apartment offers but without the extensive footprint of a detached house.

Smaller lot sizes: more compact homes

An important factor in the evolution of home size is the reduction in lot sizes across the country. According to the HIA-CoreLogic Residential Land Sales Report, the median capital city lot size was 391m² in late 2023, a significant drop of over 11.1 per cent since 2013 and a dramatic 33.8 per cent drop since 2003. In regional areas, the median lot size was 646m², slightly larger than in capitals but still showing a reduction over time.

This trend toward smaller blocks is another factor compressing the overall size of Australian homes, further influencing the shift towards efficient, cost-effective design.

Despite occasional headlines claiming the opposite, Australian homes are not getting bigger. Rather, they are trending towards efficiency, reduced footprints, and cost sensitivity. The growing preference for apartment living, tighter lot sizes, and urban planning regulations are redefining the Australian home market.

While Australian homes remain comfortable, they increasingly reflect an era focused on efficiency, urban density, and affordability – qualities that will likely continue shaping housing trends well into the future.

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First published 18 February 2025