Whats the Best Size House?

I've mentioned before the complete fixation that the entire building industry has on over-priced, over-sized MacMansions and now the statistics suggest that Australian home buyers agree with me!

These figures from Perth, which has an urban sprawl to rival LA's, but I suspect there would be a similar story in most large Australian cities. Well according to figures from REIWA at no time over the last 10 years have bigger houses performed better than smaller in terms of capital gain News on the street from agents is that buyers use location and lifestyle to make their choice rather than size. The picture really is a mixture with the baby-boomers and migrants wanting smaller properties nearer the CBD and families moving to the outer suburbs.

The statistics are that since 1998 the average annual growth rate of three-bedroom house was 13% and a four-bedroom house grew at 11.7%. On the face of it a clear difference, but remember almost every new house built in Perth's outer suburbs are 4x2, and new houses always have a lower rate of price appreciation than an established home.

Younger families want more bedrooms, but as the children become teenagers families are prepared to look at slightly fewer bedrooms so long as they are a good size and well separated from the parents. In other words a versatile house will always have a larger market than one which one has only one really practical configuration. As the population ages and particularly if the birth rate drops with as the economic outlook gets bleaker, I'm not sure I'd be investing in a 4-bedroom home unless I absolutely needed the extra space. The exception would a house which could easily be re-configured into having semi-indpendent living space for a boarder or a dependent relative.

Overall the statistics suggest that Australia, unless they open up their immigration policy significantly, will be looking at the same aging population as elsewhere in the Western world. Meanwhile of course the real estate market seems out of touch with REIWA expecting that sales of 4-bedroom homes will outstrip those of three bedroom homes as the huge number of project homes in Perth's northern and southern suburbs come onto the market. But 4-bedroom house will always be worth more than a 3-bedroom house, wouldn't it?

Perth Mansion

Photo Credit: TheLab