What happened to the Aussie Backyard?

Australian house blocks are shrinking.

A decade ago the average Australian block size was around 700sqm. Today freestanding homes are being built on blocks less than 300sqm and townhouses with common walls are being built on lots under 200sqm. The shrinking lot size is evident in both infill development and greenfield projects.

Planning regulation in existing suburbs do include limits on the amount of dwellings per lot size while site coverage and building setback rules are also in place to ensure there is a “yard” on most lots, but this is still only relevant in certain zones.

Aerial photographs such as this one in Melbourne’s Northern suburbs show smaller block sizes are appearing all over the country.

Australian Lot Sizes

Source: Nearmap

Increasing infrastructure costs for developers in greenfield areas has lead to them decreasing lot sizes in order to achieve profit targets with new lot sizes decreasing around 5.5% per year.  The graphics below show the sales volume of new land releases and the change in median lot size across Australian capital cities over the last 3 years.

Median Lot Sizes and Sales Volumes

Source: UDIA

Whilst many Australians don’t want to live in a house without a backyard, the changes in block size are supported by the market as home buyers are forced to seek value and affordability.

The information contained in this article is General in nature and has been prepared without taking into account your objectives, financial situation and needs. When assessing any investment you should also consider that past performance is not a reliable indicator of future performance.

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