How the housing landscape is changing - John McGrath

Australia’s housing landscape is changing as we try to keep up with population growth and help young buyers get into the market. Not enough dwellings are being built, with smaller housing lots and higher apartment towers among the solutions to address both lacking supply and the affordability crunch.

As discussed in the McGrath Report 2025, a freestanding house on a quarter acre block, or 1,012sqm, used to be the norm for family living in Australia. But this scenario is rapidly moving into the rear view mirror.

Governments are increasingly wary of the high costs of delivering new infrastructure and services to support large land releases for development on the city fringes, and more buyers are looking for low-maintenance and lifestyle-rich accommodation in existing urban areas.

This has increasingly required our cities to build more on less land.

In 2023, soft consumer demand and industry capacity constraints led to a 33% reduction in the number of urban fringe housing lots being released to the market, compared to the annual average across the previous decade. In addition, the average size of these lots dropped from 481sqm in 2014 to 414sqm in 2023.