Australia's Significant Housing Shift: Detached Homes on the Rise

Australia's housing market is changing, moving away from the preferences of town planners and social engineers. Detached houses now make up 62% of new builds, while apartments have dropped to 23% and townhouses remain at 15%. In the ACT, 64% of new completions are apartments, but Queensland and Victoria are lagging at just 17%.?

This shift towards houses is largely due to rising costs making apartments less appealing, and a lack of top-tier builders for large projects.

On the Gold Coast, there’s a unique trend where, despite shrinking average lot sizes (now 432m2), new homes are larger at 282m2, indicating a demand for space.?

With 22% of Australians living alone and another 25% as couples, the affordability crisis raises questions about this trend's sustainability.

Housing finance shows two contrasting trends: 77% of new home loans are for existing homes, while loans for new builds are lagging significantly. Last year, only 124,000 new home loans were issued, far below the 187,000 needed annually to meet demand, and even further from the 200,000 required for the projected population growth.?

Only 50,000 loans are going to new investment housing, but to maintain steady rental vacancy rates, Australia needs around 70,000 new rental homes each year.

Overall, the federal government’s claim to build 225,000 homes annually seems unrealistic. Action is needed to encourage more new rental properties. Meanwhile, average new loan sizes continue to rise, nearing $650,000, indicating that larger loans are becoming the norm, despite fewer borrowers.

Please feel free to reach out for a confidential conversation, whether you are buying, selling or simply want to talk about the market call me on 0410 044 463.