Finance Property Buyers hungry for cheaper, smaller housing

Buyers hungry for cheaper, smaller housing

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The quest for affordable housing will fuel the rollout of a variety of smaller apartment-style homes in Australia’s urban fringe suburbs in the coming years, according to a leading housing player.

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Metricon’s managing director, Ross Palazzesi, believes the mass volume-built market will move away from “the big house with the lot” to a more “niche” market, taking in higher density homes such as apartments and town-house style accommodation.

“The detached market is going to diminish and the attached market is going to increase in whatever form.”

This means estates which have been dominated by stand-alone homes on 450sqm-550sqm blocks will include higher numbers of townhouse-style homes on narrower, more compact lots.

“You will be able to get a two-bedroom apartment in these estates for around $300,000 compared with $450,000 for a traditional house and land package,” says Mr Palazzesi, whose company builds homes in Victoria, South Australia, New South Wales and Queensland.

“The detached market is going to diminish and the attached market is going to increase in whatever form.”

The Metricon chief says the issue of affordability “is here to stay”.

“The challenge for us and other builders is to get affordable accommodation for a large part of the market which is currently locked outside of that market. And that means we are going to end up with smaller homes. The development industry is already cutting up lots in smaller sizes. We have new house blocks with
8-metre frontages. So in future there will be a combination of detached and attached homes. We will have a much higher density than we have had in the past.”

Mr Palazzesi says the apartment-style homes have already sprung up in many established middle-ring suburbs and will become “more common” in new outer suburban residential estates in the southeast, west and north of Melbourne and in the southwest of Sydney.

Mr Palazzesi says as well as affordability, people’s lifestyles will drive the push to more compact housing.

“People’s lifestyles are taken up with a lot more activity and people don’t want to necessarily mow the lawns,” he says. “Whether it is a good or bad thing, people are doing other things with their leisure time rather than gardening. We have a growing demographic which is single or ageing and they don’t need five bedrooms. The whole concept of having a compact, low-maintenance home is far more acceptable than it ever has been.”

The Metricon boss says Australia’s capital city suburbs are undergoing an evolution rather than a revolution in housing, and while there still will be those who want a big block with the traditional home on it, others driven by cost concerns will opt for affordably priced, compact housing models.

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