In 2009 Australia built the largest new homes based on average floor area in the world… in some estates exceeding 120 square metres
The global financial crisis has finally hit Canberra, Australia. The wealthiest city in one of the most prosperous countries in the world at the beginning of the 21st century has felt a pinch in the hip pocket. As the capital of Australia, Canberra has enjoyed the dual benefit of a public servant economy and a healthy take of disposable income courtesy of a well-paid workforce with not much else to do but spend dollars on themselves and their kids. This flow of capital goes towards keeping the city in a comfy ‘immune from the global downturn’ state that has also happened to prop up the local real estate market rather well. But that is all over. The housing market is taking a dive. And besides the fact that prices are the lowest they have been in six years, how do we know this? Well, partly because there are too many bedrooms.
The long boom saw the real net disposable income in Australia rise continuously between 1992 and 2009. It fuelled a speculative real estate market that, with the benefit of favourable fiscal policies, drove a construction industry fed on the drive for big homes.
While even Australians love to join in the global sport of pointing the finger at the US for demonstrations of excess, we only need to look in our back yards to find out who comes out on top when it comes to building big. In 2009 Australia built the largest new homes based on average floor area in the world. Guess which city in Oz was building the biggest of them all, yep, the Capital. So much so that in new greenfield estates on the edge of the city, the average floor space per person exceeded 120 square metres.
To put that in perspective – it is like only letting nine people swim in an Olympic sized pool at any one time. Most of the rooms in these new homes (yes we call them Mcmansions in Australia too) were bedrooms.In an effort to capitalise on our own little piece of Australia, we have found ways to squeeze as much bricks and mortar onto a suburban block of land to make the most of the investment opportunity. From a design perspective, you can have only so many kitchens, lounge rooms, bathrooms and garages.
This leaves the home building companies two options – to design smaller homes or extra bedrooms- and the latter has prevailed. Over the last twenty years the average floor area of new houses in Australia has increased by 30% and the corresponding reduction in block size is about the same. This has created a very different urban form to the sprawling suburban layout created in the post war period and derided so compellingly by Jane Jacobs in the 1960s.
The difference is that, in the post war version of the suburb, there was at least some semblance of a useable landscape space in the back yard. Today that has gone – replaced by bedrooms and too many of them. But how do we know that there are too many bedrooms and what is wrong with a few extra spaces for the in-laws when they visit for the summer holiday season? From a sustainable city perspective there are two problems that come to mind. The first is that these empty bedrooms sit on top of landscape spaces that could be better used as gardens, lawns, play areas or a chook run, or just left alone, for shrubs, bugs and grubs to multiply. The second is that since the bubble burst in the real estate market, people are buying houses with fewer bedrooms in an effort to reduce their exposure to risk, so houses and units with too many bedrooms aren’t selling.
Lets start with the evidence. The Australian Bureau of Statistics have in recent years begun to collate information on the number of bedrooms on properties as well as the standard population statistics concerning the number of residents per dwelling. What we know is- not only that we are experiencing an increase in house size, largely fuelled by a flourishing of bedrooms, but we have also seen a drop in the number of people per house hold. To put that big statistical story into perspective, 40% of all bedrooms designed into these new homes are not actually used as bedrooms. Studies perhaps, spare rooms for the in-laws maybe, craft rooms, spiritual retreats, media centres possibly, but they are not used for the nightly activities usually associated with bedrooms. These extra rooms are also squashed between the side and back fences, leaving a residual strip of landscape. A ribbon of pebbles, pavers and strappy leaved, space saving, architecturally astute rows of plants that offer nothing more than a reminder of just how close we are to our neighbours (spatially not emotionally).
These residual landscapes are not big enough to grow a tree that, one day, might offer shade from the 40 degree celsius (100 in the old scale) afternoon sun. Nor are they square enough to host a lawn, or possessing vege garden worth investing in. Society sometimes seems to tell us that we don’t need these backyard spaces, we no longer ‘go outdoors’ – this shift really reflects a parenting shortfall rather than a cultural phenomenon.
Worse still the environmental impact of too much pavement, hot tiled rooves, and the loss of nature’s bio-filters – we call them trees – is significant from an economic, social as well as environmental perspective. Finally the market fundamentals used to argue for houses with surplus bedrooms and asserted that this was a financially astute decision for the home owner.
Recent evidence suggests this is also coming to a grizzly end. Recovering the cost (both environmental and financial) of building unused bedrooms, far from snaring a tidy profit, is becoming harder as the market for six bedroom homes dries up. That said, this argument was always dubious as the fiscal advice was more akin to share trading; you buy now and sell some time into the future.
None of that investment advice included the operational cost of heating and cooling, the cost of maintenance and renovation were not factored in. The laws of supply and demand provide two elegantly simple explanations as to why there are now too many bedrooms in Australia – the first is that there are not enough families with enough kids to fill them.
Secondly is that if the logic of building unused rooms was for the purpose of investing in brick and mortar, then the market forgot that those families least likely to be able to afford these houses are those with enough kids to fill those rooms. Ergo those who are most likely to be able to afford a six bedroom don’t need them. Something went wrong there. A bit like the sub-prime led crash in the US, we are experiencing a surplus bedroom led collapse of the housing market.
Fortunately, we are only seeing the rise in vacant bedrooms not the wholesale retreat of entire neighbourhoods. Perhaps it serves as a canary in the coal mine and we should take notice.