Block sizes in Australia are shrinking and so are buyer expectations – realestate.com.au

The land area of ​​sold properties is decreasing and Buyer search patterns are consistent with this trend due to changes in economic, demographic and planning factors in the past decade.

New data from PropTrack shows that the average land size of homes sold nationally has been on a downward trend since 2015.

In 2015, a typical house for sale had an area of ​​670 m². This figure has steadily decreased over time, with the average size of a house falling to 645 m² in the last year.

The decline is likely a result of the construction of new homes on smaller blocks, which is a product of many factors.

An important driver is population growth. According to the Australian Bureau of Statistics, Australia’s population has increased by 15% since 2015. This is expected to increase by a further 16% over the next ten years.

Population growth naturally increases demand for housing, especially in urban areas where the majority of Australians live. With the supply of land limited by geographic boundaries, planning and zoning restrictions, land and ultimately housing costs tend to rise.

To keep prices within reach of Australians, many new homes are being built have reduced land area.

Block sizes are decreasing to maintain affordability and maximize land use. Photo: Getty

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In recent years, state governments have also implemented a number of zoning reforms to encourage the “infill development” of suburbs close to transportation and amenities. This includes increasing the areas where low- and mid-rise housing can be built. As a result, more townhouse and duplex projects have emerged, usually in smaller, subdivided blocks to maximize land use in these areas.

These changes have contributed to a faster decline in the size of housing blocks in capital cities compared to regional areas.

The decline in block sizes has provided an interesting parallel in buyer behavior, with buyers adjusting their expectations to suit smaller land sizes.

Buyers are looking for properties in smaller blocks

In 2020, the most sought-after home type was a four-bedroom, two-bathroom house on a 6,000-square-foot lot. The second most searched for property was a four-bedroom, two-bathroom house on a 500 sqm block, followed by three-bedroom, two-bathroom houses on a 500 sqm block.

As of 2021, buyer search preferences have changed, with the most popular lot size and configuration consistently being a 5,000-square-foot home with four bedrooms and two bathrooms. Larger blocks of 600 m² have since dropped out of the top three, replaced by smaller blocks of 400 m² with four bedrooms and two bathrooms, which became increasingly popular in 2024 and 2025.

While the change in searches is likely to have been partly influenced by the supply of housing on the market, the declining affordability of large residential blocks is another likely factor, especially in capital cities.

With fewer new houses being built on large blocks and the supply of existing houses remaining largely unchanged, the costs of larger homes are usually higher.

In light of affordability pressures, buyers have had to turn to homes in smaller blocks, leading to increased demand for these properties.

Although the land area has decreased over the years, an important detail to highlight is that the size of new houses has remained fairly stable.

House size remains stable, despite the land area showing a downward trend

Nationally, the average floor area of ​​a new-build home is currently 241 m². Over the past decade, the interior area of ​​a house has consistently fluctuated between 230 m² and 240 m².

This has also been evident at the state level, with new homes in most states showing little change and in some cases an increase in home size since 2015.

Although there has been a shift from private backyards to shared communal and green spaces in recent years, internal living spaces are still a priority for buyers and also for developers focused on maximizing land use.

What houses could look like in the next ten years

Over the next decade, the composition of our cities is likely to evolve further with an increase in the number of semi-detached and attached housing (townhouses and apartments), supported by planning and zoning reforms. The block size of detached dwellings (houses) is expected to continue to decline as land becomes scarcer and less affordable.

As homes on smaller blocks become more common and make up a greater share of properties on the market, buyer preferences may shift even more toward compact lots.

Despite this, we expect house size to remain relatively unchanged over the coming years as Australians continue to value generous internal living spaces.