For some, the modern era is one in which they work hard and their money doesn’t buy as much as it used to. For others, a life of work has yielded enough money for a comfortable retirement but they don’t need the hassle of a large home or a large yard.
Whether young or old, up and comer or downsizer, or all points in between, many Australians have been turning to smaller blocks for their houses. Block sizes started shrinking in Perth more than 10 years ago.
By the Numbers
So, what do the numbers say? Right now, the median size of a block in the Perth metropolitan area is estimated at 450 sqm. A block that qualifies as a “cottage lot” in Perth is between 250-350 sqm. However, a Baldivis development is now selling blocks as small as 171 sqm.
Looking at historical numbers shows a definite trend toward smaller blocks, whether or not people are intentionally downsizing. In 2003, the median block size was estimated at 690 sqm and it cost $96,000; by 2008, the median block size was 538 sqm and sold for $255,000. Currently, that 450 sqm median block sells for $239,000.
In 2003, the cost of a square metre of land was $139. In 2013, that number has risen to $531. This has caused developers to seek creative solutions to allow more Australians to enter into the home market. According to the blog on the Urban Development of Australia’s Western Australia site, a developer named Nick Perrignon has recommended that blocks be offered as small as 75 sqm to ensure affordability.
In the 2012-2013 financial year, 27% of lots that were approved for subdivisions were 320 sqm or smaller. In 2008, the number was 16%.
What the Numbers Mean
In Baldivis, it means that an area that is already hot has just become more affordable. The 171 sqm blocks sell for $112,250, which is very reasonable in today’s market. This can only help Baldivis attract more people.
As more people decide they don’t need a big backyard and would like to have more disposable income, we see this trend continuing.
Call one of our mortgage brokers and let’s talk about a home loan in Kwinana: (08) 9527 1800.