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A Growing Trend Impresses First Home Buyers


With outside the box thinking and Government initiatives, first home buyers can get on the property ladder even in first-class cities like Sydney, Australia.

In this blog article, we look at a growing trend in the residential property sector that’s not only winning awards; it’s meeting the needs of first home buyers and helping reduce future carbon emissions.

House Size

Did you know the average size home in Australia had grown to a massive 238 square metres? The peak was 2017/18; today, the average is size is 186 square metres. Why the decrease in size? Half of all homes build now are apartments, and there is a demand for small townhouses. The McMansions are still being made, too, just not so many of them.

Property developers prefer to build the McMansions as they value up the home and land package, but these homes are not meeting buyer demand, so they’re not solving the housing crisis.

Demographics are playing a more significant part in what type of homes are built today. Smaller families, couples, millennials want affordable homes in better locations, i.e. nearer to amenities and closer to work, and developers are now hot on the tail to develop innovative small homes, micro homes and apartments.

Micro Homes

Micro homes are said to be around 65 square metres. However, that’s smaller than most Australians are comfortable with, so their ‘small homes’ are about 100 square metres.  It’s worth pointing out that the average home in most European countries and the UK is less than 100 square metres.

First Home Buyers Impressed

Micro homes are attractive to first home buyers (FHB)s as they’re affordable, designed well and in great locations.

The new generation of first home buyers is genuinely concerned with climate change. Living in the suburbs and driving to work, the shops and schools are not what this demographic desires. Walking, cycling or taking public transport is the preferred mode of travel.

As a result, micro homes and apartments do not, by default, come with a car park. No longer is a garage a necessity for many homebuyers. Plus, there is also a trend to repurpose garages as living spaces. Fewer vehicles on the road reduce carbon emissions, and the younger generations are making a conscious decision not to drive, therefore is no need for a car park.

Gateway to Affordability

Less land is required for smaller homes so more properties can prevail to meet buyer demand. The micro home design impresses many different property markets, earning awards for their diminutive yet innovative designs.

These winning designs demonstrate quality is attainable and affordable as demonstrated in New Zealand recently. Winning designs would cost the homebuyer between $90,000 and $190,000 before consents and site-works. PrefabNZ’s chief executive Pamela Bell stated.

This competition has delivered asset-rich but cash-poor Aucklanders a dozen choices of smart, sustainable, speedy and affordable housing solutions for their own backyards.

In Australia, small homes are also winning awards, plus they’re what buyers want.


Government First Home Buyer Initiatives

The government grants and initiatives are helping first home buyers get into the Sydney property market and other centres.

The First Home Owner Grant (FHOG)

This grant helps first home buyers with their deposit through a subsidy. For example, FHOG will provide $10,000 towards the construction of a new home.

Stamp Duty Concessions or Exemption

Stamp Duty is a high cost, and in NSW, its removal for first home buyers is welcoming. For the purchase of a home worth just under $600,000, the savings is around $22,000.

First Home Loan Deposit Scheme

Stumping up with the deposit is the toughest challenge for first home buyers. For example, buying a $600,000 home with a 10% deposit of $60,000 is likely to take many years to achieve. Plus, the low percentage deposit incurs lenders mortgage insurance (LMI) too.

The first home loan deposit scheme allows for a 5% deposit with no LMI. So now the deposit required is $30,000 minus the FHOG. The first home buyer needs just $20,000 to get into their own home if they qualify for the mortgage.

UK – Help To Build Scheme

A quick mention here is that the UK Government inspires budding self-build homeowners to have more say in how their community develops and grows. The help to build scheme is a post-COVID initiative to kickstart the economy and new builds will not have to conform to strict designs. Gone are the McMansions and all homes looking the same. More design and architectural flair, and size will prevail as part of the self-build initiative.


The paradigm shift from the McMansion in the suburbs to the micro home in inner urban areas is a trend that will continue.

First home buyers are driving the change to get onto the property ladder in cities like Sydney with the help of government incentives, without compromise on property design or function.