The Decline of McMansions in Australia
A recent ING study surveyed over 1000 Australians about their home preferences. Over a quarter (26%) said the cost of maintaining and running a larger home would see them gravitate to a smaller house. And 19% said they would consider a smaller outdoor area for ease of maintenance.
According to the 2020 CommSec Home Size Report, Australia has some of the biggest homes in the world. But it seems that there is a swing in the other direction.
A 2020 Australian Bureau of Statistics (ABS) report shows that Australian homes are being built on smaller blocks with a size decrease of 13% over the past 10 years in capital cities.
Why the Switch to Smaller Homes?
With the cost of living rising (as well as the cash rate), cracking the property market can feel like a slog. But revising your wish list to include a smaller and smarter home could make it easier.
On average, smaller homes, townhouses and units tend to be more affordable, and this can be a great option for those wanting to get into the housing market in a more attractive location.
A smaller dwelling delivers other perks too. ING’s study highlighted the growing preference of lower-maintenance homes to simplify lifestyles.
According to the ABS, Aussies spend around three hours a day on domestic activities. But a smaller space can reduce cleaning time. And with a smaller outdoor area, you can reclaim your weekend and say goodbye to all that garden work. Also, smaller homes can be more efficient when it comes to energy consumption.
A Smaller Home May Help Make You Eligible for Government Schemes
The First Home Guarantee and Regional First Home Guarantee offer loans with a low deposit of 5% with no lenders’ mortgage insurance (LMI). And the Family Home Guarantee offers eligible single parents loans with a deposit of just 2% and no LMI. However, the eligibility criteria include property price caps that are dependent on the state and geographical area you buy in.
Opting for a smaller, more affordable property could help you meet the eligibility criteria and speed up your home-buying journey. But be quick as places are limited… a fresh round of intakes is available from the 1st of July.
Frequently Asked Questions
What is Mortgage Prison?
Australians are increasingly choosing smaller homes due to the high cost of maintaining and running larger houses.
How Do Credit Cards and Personal Loans Affect My Ability to Refinance?
Smaller homes are generally more energy-efficient and require less time for cleaning and maintenance.
What Can I Do If I’m Stuck in Mortgage Prison?
The First Home Guarantee and Regional First Home Guarantee offer loans with a low deposit of 5%, and the Family Home Guarantee offers loans with a deposit of just 2%.
How Can I Negotiate with My Current Lender?
The trend towards smaller homes is making housing more affordable and accessible, especially for first-time buyers.
What Other Savings Can I Ask For?
Smaller homes often come with smaller outdoor areas, which are easier to maintain.
Can a Mortgage Broker Help Me?
A fresh round of intakes for government schemes supporting smaller homes is available from the 1st of July.
Get the Ball Rolling
While you search for the perfect small home, we can get to work on the home loan hunt. If you are a first home buyer, we know all the ins and outs of applying for government schemes, like the Home Guarantee Scheme. Not all lenders participate, but we know who does and can give you some options to compare.
We are also clued in on other government schemes you may be eligible for to help stack up the savings.
If you’d like to find out more, get in touch today!
Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.
About the Author:
Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.
Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).
Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.