Why is everyone downsizing?

It seems like a bit of a craze: everyone’s downsizing. From retirees to young families, people are choosing to live in smaller homes. In fact, research from the Australian Bureau of Statistics (ABS) is showing that the average floor size of the Australian home has hit a 20-year low to sit at 186.8 sqm on average. The country also lost the first place title of having the largest homes in the world a few years ago (to America).

Why is this happening though? Primarily, the reasons people are embracing ‘smaller’ houses can be condensed into five main reasons:

Changing demographics

Photo by Vlad Sargu on Unsplash
Planning to retire? You might be thinking you don’t need all the space in your current house (Photo by Vlad Sargu on Unsplash)

As you may be aware, Australia has an ageing population. With more than 20% of retirees planning on moving from their current home into a smaller one within the next five years, you can see how the growing number of retirees in the population would be affecting house and apartment sizes. Most plan to move for either convenience — to be closer to family and friends, the supermarket or something else — or because they don’t need all the space now that the kids are gone, or due to health concerns. Whatever the reason, it’s definitely impacting house sizing.

Smaller blocks

Finding space to build a large house is getting harder and harder in the cities

Australian’s have been building big houses on bigger blocks for years now. Unfortunately, you can’t easily build a mansion on a small block, and so house sizes have shrunk as lot sizes have come down. In part, this is due to the fact that larger blocks are being split to meet housing requirements as the population grows. Building in these spaces requires smaller houses that are built smarter, which has lead to the rise in townhouse and apartment developments throughout the country.

Affordability issues

PropertyMash
Can the coming generations afford the houses people today live in? It’s not likely for most of them

Buying a house or apartment is a big investment. For a country where the cost of living is rising and affordability is increasingly becoming an issue, especially considering that Millennials, Generation Z (2000 – 2010) and Generation Alpha (2011 – 2025) are the first generations where their personal wealth is expected to be less than their parents, a financial trend not seen since the 1800s. With a large percentage of the population simply unable to afford big houses and apartments, they are rightly choosing to buy smaller.

Additionally, operating and running a large house requires far more money in the long term: there’s more space to heat and cool, and if you like updating the space regularly, furnishing it can be an expensive (not to mention time-consuming) process. For retirees, this can eat into their pension and super in unsustainable ways, pushing them to consider buying a smaller house, townhouse or apartment.

Environmental consciousness

environmentally friendly property australia
Growing concerns about the environment are driving some buyers to choose apartments or townhouses over traditional houses

The growing focus on looking after and protecting the environment has pushed a growing number of people to reconsider their house. Due to the amount of CO2 released in both the construction and continued upkeep of large houses, some people are choosing downsizing in order to help out Mother Nature. Of course, there are several incredible eco-friendly developments going up throughout Australia, and particularly in Queensland, all of which are worth considering if you’re thinking about the environment.

Lifestyle changes

Keeping it simple is the name of the game

The rise of minimalism as a lifestyle choice has also impacted house sizes. As people have fewer belongings (those that do not “spark joy“, as the famous Marie Kondo would say), they have less need for large houses with excessive storage options. This minimalism has also impacted other lifestyle choices that you would not necessarily think of at first. For example, people are less likely to buy ‘at home’ gym equipment, and instead sign up for a gym membership. This leads many to choose apartment living, as a large number will have gyms that residents can use.

Generations X, Y (and, if trends continue, Z who will be entering their 20’s next year) are far more likely to sacrifice space in order to be closer to work and recreational areas and activities. This had lead to a large number of this generation being far more willing to live in apartments, in order to remain close to what they deem important.

In essence, people are choosing to downsize for a number of reasons, and it’s not often a single reason. Quite simply it is a world wide trend which Australia is also experiencing. However, if you are choosing to downsize, it’s worth planning sooner rather than later. Here are some different types of projects to look at, including townhouses, terrace homes and apartments. On PropertyMash.com you will find property to suit for every type of buyer at every point in the life journey.

Written: 13 September 2019, Updated: 8 October 2019

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