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Why are Australian properties g...

Why are Australian properties getting smaller?

Australian homes are getting smaller, with people living in fewer square feet than ever before, new analysis of the property market shows.

Research carried out by the Australian Bureau of Statistics on behalf of CommSec has led to the discovery that the average size of a new-build property down under now comes in at 189.8 square metres, which marks a decrease of 2.7 per cent over the last year.

What's more, this places property sizes in Australia at their smallest for 20 years, with even apartments gradually decreasing in size, shrinking by an average of ten square metres over the past ten years.

Craig James, chief economist at CommSec, commented: "Australians continue to build some of the biggest houses in the world, but an increasing proportion of Australians - especially in Sydney, Melbourne and Brisbane - also want smaller homes like apartment, semi-detached homes and townhouses."

But why is this the case?

Speaking to the New Daily, Peter Phibbs, a social economist at the University of Sydney, explained that it may be part of a knock-on effect from the fact that younger people are finding it harder to get on the property ladder than ever before.

This means that members of the baby boomer generation are increasingly purchasing apartments or downsizing to smaller properties in their later years so they can help their millennial children to get on the ladder, or to enable them to gift their property to their children to erase this struggle.

Mr Phibbs added that another factor affecting the growing trend for smaller homes is that it's becoming more expensive to both buy and build larger properties.

"People are looking at a slightly more efficient way to build," he explained.

Experts believe that this trend shows that the gap between Australia's 'haves' and 'have nots' is getting bigger - literally.

All information provided is of a general nature only and does not take into account your personal financial circumstances or objectives. Before making a decision on the basis of this material, you need to consider, with or without the assistance of a financial adviser, whether the material is appropriate in light of your individual needs and circumstances. This information does not constitute a recommendation to invest in or take out any of the products or services provided by SMATS Services (Australia) Pty Ltd or Australasian Taxation Services Pty Ltd.

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