According to the State’s Building Commission, new houses in Victoria were 252 m2 on average in 2008-09 compared with 217 m2 in 2000-01. This report says “homes in Victoria are getting bigger, much bigger – leading to warnings that some people may be building homes bigger than they need by borrowing more than they can afford”. The Building Commissioner is quoted as saying:
The promotion of larger homes by medium and high volume builders, where added rooms are used as a marketing tool, have contributed to the increase in size……consumers are up-sold to home theatres, additional bathrooms and media rooms
I have a couple of thoughts/reactions to this.
First, some context – while there are buyers who want a behemoth like Metricon’s 49 square ‘Monarch’, almost three quarters (74%) of Growth Area buyers purchase a single level dwelling. Moreover, 70% of homes are less than 30 squares and 47% are less than 26 squares. Some are buying a “McMansion”, but most are buying something like Metricon’s Grandview.
Second, the claim that buyers are so gullible they are “upsold” to bigger homes they don’t “need” is patronising. Buyers do know what they want. Two thirds of Growth Area purchasers are buying their second home – half of this group are buying their third or fourth home. And nearly half (48%) of adult buyers in the Growth Areas are aged 35 years or more.
Third, if people are buying homes they can’t afford, that’s not primarily an issue of dwelling size. I expect over-stretched buyers would more likely be purchasing a home that’s closer to the city centre — it would be smaller than a fringe “McMansion” but cost more because of its greater accessibility. If there has been an upward movement in the proportion of people buying homes they can’t afford, the problem and the solution lie with lending policies rather than with dwelling size. Read the rest of this entry »