In recent years, Australia and the United States have alternated having the largest new homes. New data suggests Australia has retaken the lead:
In any case, that Australian homes should be costly is not so surprising given the peculiarities of the domestic market.
The Australian dream requires you to own a detached house with a large garden, a land-hungry type of accommodation that makes up no less than 76 percent of all homes.
Three-quarters of all homes have three or more bedrooms, and almost a third have four or more. The average newly built home is now the largest of any country at 243 square meters (2,615 square feet), taking the McMansion mantle from the United States.
And, while it is one of the emptiest countries on the planet, it is also one of the most urbanized, with most of the population crowding the coast in just eight sprawling cities.
I wonder how much this has to do with something I suspect is at play in the United States: housing starts may be down but those that are being built are primarily aimed at the upper ends of the market toward people who haven’t been hit as hard by the recession.
It is interesting that this is buried in the final paragraphs of a story about the Australian housing market. The overall piece suggests that a country can have large homes without necessarily having an overextended housing market like we see in the United States. One complaint about McMansions in the United States is that they have ruined the housing market, pushing buyers and lenders to have bloated mortgages and generally corresponding with American habits of overspending and incurring debt. But it doesn’t have to be this way: the article tells of different mortgage patterns in Australia such as homeowners paying them off quicker and having a small amount of subprime loans. In other words, having a large home doesn’t have to be tied to the ideas of profligate spending if the system is set up in a different way.
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