Suburban growth compared over decades: Matt Jones reveals the disillusionment of the Australian dream, as depicted in a solitary satellite image
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In the past few decades, Australian suburban homes have undergone significant changes, becoming larger and better in quality. However, recent affordability pressures and construction costs are starting to impact this trend, according to a report.
Growing Home Sizes and Improved Quality
Home sizes in Australian suburbs have tended to grow, with many new houses offering multiple bedrooms and modern designs catering to family lifestyles and comfort. Quality improvements include adherence to stricter building codes, energy efficiency standards, and the inclusion of lifestyle features such as modern kitchens, outdoor living areas, and better finishes.
Factors Influencing Changes
Several factors have contributed to these changes. Population growth and migration have fuelled demand for housing in suburban areas, driving construction and development of larger homes. Economic growth and rising incomes have allowed homebuyers to seek larger and higher quality homes. Planning and development controls in some inner suburban areas maintain character homes and limit density, keeping values high and encouraging better-quality housing maintenance and refurbishment.
Recent Challenges
Recent surges in construction costs and high prices have affected new supply. Builders require sufficient presales to finance construction, which has led to a premium on new homes and restrained the ability to build as many homes as the population requires. This sometimes results in more people occupying existing homes rather than building or moving to larger homes, impacting average home size trends.
Affordability Concerns
The affordability of housing has become a significant concern. In Brisbane, the monthly mortgage repayment now consumes 81% of the average wage, compared to 31% in 1975. In Sydney, the median home price has increased from $34,000 in 1975 to $1,627,625 in 2024. Over the same period, average full-time wages have increased by 1,183%. Only half of the housing market was affordable to service a loan in September 2024 for a household with a relatively high gross income of about $172,000 per annum.
Impact on Household Dynamics
Despite the increase in average bedrooms per dwelling, many homes are underutilized or owned by people not right-sizing, suggesting inefficiencies in housing use. Baby Boomers bought homes when prices were just four to five times the median wage, while today's families are paying double to triple that.
The Current State of Newly Built Homes
The build quality of new homes is not as good as it was 40 years ago. Additionally, the average size of land that Australians enjoy when purchasing a home in a newly built suburb is small. In Sydney, mortgage repayments now require 143% of the national median monthly wage, up from just 44% five decades ago. In Melbourne, mortgage payments take up 91% of monthly wages.
The Need for Change
Mr. Drennan, a housing expert, states that there needs to be a fundamental change to impact the change in house prices, but currently, there's nothing being done to change things. He emphasizes the need for policy changes to address the affordability crisis and ensure that everyone can afford a comfortable home.
References:
- ABS report on housing affordability
- Urban Development Institute of Australia report
- RBA report on housing affordability
- Planning NSW report on suburban development
- News about the housing market reveals that Australian suburban homes have grown in size and quality, with modern designs catering to family lifestyles and comfort. (Growing Home Sizes and Improved Quality)
- Finance experts are voicing concerns about the increased affordability pressures in the housing market, citing escalating construction costs and high prices as major factors. (Recent Challenges)
- According to real-estate analysts, the current state of newly built homes is not as good as it was 40 years ago, with the build quality lacking and the average land size being small. (The Current State of Newly Built Homes)
- To tackle the affordability crisis, personal finance experts suggest the need for policy changes, emphasizing that such changes could significantly impact the current trend in house prices and ensure a comfortable living space for everyone. (The Need for Change)
