Housing shrinkflation has Aussies paying more for less

New data from greenfield land sales specialist Red23 shows that Victorian lot sizes are shrinking to ensure new homes in the outer suburbs and Geelong remain affordable for first-homebuyers, amid rising land and construction costs:

  • The traditional 400 square metre lot offering had been superseded by a 350 sq m lot.
  • A lot in metropolitan Melbourne had shrunk 3% to 388 square metres over the past 24 months.
  • In Greater Geelong, the median lot size had fallen 17% over the same period to 400 square metres.
  • Stockland are selling three-bedroom townhouses on a 186 square metre block at its Highlands estate in Craigieburn in the North for $510,000.
  • Lendlease is offering a three-bedroom detached home on 230 square metres at its Aurora estate in Wollert for $490,000.
  • Despite these smaller lot sizes, prices continue to rise – Red23 recorded a 1 per cent rise in the median Victorian lot price in August (to $332,400) up 4 per cent on an annual basis.

Shrinkflation is a structural trend that will continue as the federal government reboots the ‘Big Australia’ mass immigration program.

The latest Intergenerational Report (IGR) projects that net overseas migration (NOM) will increase to an average of 235,000 people a year:

This extreme immigration with increase Australia’s population by 13.1 million people (50%) over the next 40 years to 38.8 million people – equivalent to adding another Sydney, Melbourne and Brisbane to Australia’s existing population.

Australia's projected population growth

Such a population delude will necessarily bulldoze our suburbs into higher density, as well as shrink outer suburban lot sizes – as explicitly projected by the Urban Taskforce for Sydney:

Sydney dwelling composition

In short, Australians can look forward to living in smaller and more expensive housing thanks to mass immigration.

Unconventional Economist
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Comments

  1. Drove around Kingscliff/Casuarina at weekend. Man the block sizes v house sizes are crazy. Nice place to live, and you have the beach and some parks, but still. Prices eye-wateringly high too.

    • C'est de la folieMEMBER

      Completely nails it.

      Those paying 500k for 400 square metre chunks of the burbs of Geelong are being totally creamed.  Those doing so in the Armstrong Creek, Warralilly region are likely doing so for flood prone swamp (which may come home to roost in weeks given the recent rains and likelihood of more).

      Given that Australia has about more quite liveable land per head than just about any other nation on the planet it simply beggars belief.  What it is also setting up the socioeconomy for is the need to continue giving those living on 800 plus metres a likely speculative gain whenever they look to sell for quite some time into the future or fronting those who have shelled out for the 400 metre lots with the reality (and political consequences) of having made an epic dud investment.

      The other issue this manifests in, is the completely ludicrous need to build houses so close to major freeways (the Geelong road through the back of Melbourne and around Geelong being standout examples) that the occupants must surely end up with psychological issues.

      I would have thought a minimum of 1000 metres wouldn’t be out of order.

    • working class hamMEMBER

      That story is disgusting. A complete failure of all systems and authorities, with basically an Internet forum random being the last port of call.

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