Monday, November 30, 2009

Supersized. Our McMansions lead the world

Australians are piling on sitting rooms, family rooms, studies and extra bedrooms at the fastest rate in the world, with our homes overtaking those in the United States as the world's biggest.

The news comes as a leading forecaster predicts an acceleration in rents with Sydney rents climbing 22 per cent over the next three years.

Bureau of Statistics data compiled for Commonwealth Securities show the typical size of the new Australian home hit 215 square metres during the last financial year, up 10 per cent in a decade.

By contrast US figures show the size of new American homes sliding, shrinking from 212 square metres before the financial crisis to 202 square metres in September.

New homes in other parts of the world are far smaller, with Denmark the biggest in Europe at 137 square metres and the UK the smallest at 76 square metres...

The figures lend weight to a claim by Reserve Bank Deputy Governor Ric Battellino this month that Australian house prices were high in part because Australian houses were better.

Almost half of the $250 billion shelled out on housing each year was spent on alterations and additions with 1 in every 7 new houses "simply replacing existing houses that have been demolished."

The Deputy Governor said Australians had so many holiday houses that the latest census found 8 per cent more dwellings than households.

Sydney houses are by far the nation’s biggest with new free-standing houses now typically spanning 263 square metres - providing more than 100 square metres of indoor space per person.

But the high proportion of townhouses and apartments in Sydney pushes the average dwelling size down to 205 square metres, just below the Australian average and about the same as in the United States.

"Another way of looking at it is the number of bedrooms," said Commonwealth Securities economist Craig James. "Around 20 years ago only 1 in every 6 homes had four or more bedrooms. By 2006 it was one in every 3.5 homes."

"While the fast pace of population growth points to the need for more and more homes, we are are living in the biggest homes in the world. The simple fact is they could be better utilised."

Mr James is encouraged by slight increase in the number of Australians living in each home. The average household size has crept up from 2.52 to 2.56 people during 2007-08.

It may not seem remarkable, but it appears to be the first increase in at least a century, and perhaps the first since European settlement."

"It makes sense – population is rising, as is the cost of housing and the cost of moving house, so we are making greater use of what we’ve got. Children are staying at home longer ,and more people are opting for shared accommodation. The key question is whether it's permanent or temporary. If sustained it'll save us building 166,000 homes."

In a report released this morning (Monday 12.01 am) forecasting group BIS Shrapnel says Sydney's rental market will tighten still further next year with the vacancy rate dropping below 1 per cent.

"Medium and high-density dwellings starts plunged an estimated 28 per cent in 2009, reaching the lowest level since 1987," the report says. "Housing supply is set to fall due to the low pipeline of new apartments."

BIS Shrapnel says after climbing 6.2 per cent this year and by an average of 3.5 per cent per annum in earlier years, Sydney rents should leapfrog 7.1 per cent a year for the next three years, climbing 22 per cent by 2012.

Published in today's SMH

Graphic: SMH

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