As a homebuyer or property investor, understanding the most popular home configurations in Australia can provide valuable insights into the preferences and needs of the market. Recent data from realestate.com.au has shed light on the most desirable property types across the country, with homes featuring four bedrooms, two bathrooms, and two parking spots taking the lead. In this article, we'll explore the factors driving the popularity of this configuration and delve into the trends shaping the Australian housing landscape.

The Rise of the Classic Family Home

The four-bedroom, two-bathroom, two-parking spots home has emerged as the most-viewed property type on realestate.com.au over the past year, and was the most popular configuration in 40% of Australian suburbs. This configuration has proven to be the top choice in all states except Tasmania, where three-bedroom, one-bathroom, two-park homes reign supreme. The growing preference for larger homes can be attributed to the lasting impact of the pandemic, which has reshaped the way Australians live and work. With more time spent at home and a shift towards remote work, people are prioritising space and flexibility in their living arrangements.

PropTrack senior economist Paul Ryan highlights the significance of this trend, stating, "The pandemic caused unprecedented shifts in housing preferences, with larger homes increasingly preferred over smaller options. This change followed extended lockdowns and shifting work culture, with more working from home meaning people are spending more time at home." The need for dedicated home offices and the desire for multigenerational living have further fuelled the demand for spacious properties.

Hotspots for Bigger Homes

The suburbs where four-bedroom, two-bathroom, two-parking homes are most popular tend to be concentrated in newly developed areas on the urban fringe, particularly in Melbourne. Point Cook, Tarneit, Berwick, Truganina, and Clyde North stand out as the suburbs where this configuration dominates property views. These areas are typically populated by young families who value flexible living spaces and the potential for future growth.

The Unit Market: Varied Preferences Across States

When it comes to units, the most popular configuration nationwide is two bedrooms, one bathroom, and one parking spot. However, buyer preferences vary across different states. In NSW and QLD, an extra bathroom is highly sought-after, while ACT buyers lean towards smaller one-bedroom units. In the NT, larger three-bedroom units with two bathrooms and two parking spots are the top choice.

The recent surge in unit prices, outpacing the growth of house prices, can be attributed to the reopening of cities and the ongoing affordability challenges in the housing market.

The Allure of Spacious Living

Despite the growing interest in units, larger houses continue to captivate homebuyers. Homes with five bedrooms, three bathrooms, and two parking spots rank as the sixth most popular type of home nationally, with the majority of these properties located in affluent suburbs of Sydney and Brisbane. Established families are particularly drawn to these spacious homes, prioritizing ample living areas, outdoor spaces, and proximity to quality schools.

Compact Living in Inner-City Suburbs

While spacious homes are highly sought-after in many areas, inner-city suburbs present a different picture. In suburbs like Richmond and Brunswick in Melbourne and Newtown in Sydney, where space comes at a premium, houses with two bedrooms, one bathroom, and no parking are the most viewed property type. These compact homes cater to a diverse range of buyers, including first-home buyers, investors, and downsizers seeking single-level living.

The scarcity of land in these areas means that homes with extra bedrooms command significantly higher prices, often beyond the reach of buyers without multi-million dollar budgets. For example, in Newtown, the median price for a three-bedroom home is $445,000 higher than that of a two-bedroom home, while a fourth bedroom adds an additional $341,000 to the price tag.

One-bedroom units also gain traction in CBD areas and adjacent suburbs, where affordability constraints drive the demand for smaller, more budget-friendly options. In Surry Hills, Sydney, two-bedroom apartments cost about 73% more than one-bedroom units, while in Carlton, Melbourne, the median price of one-bedroom units is half that of two-bedroom units.

Housing Mismatch: Balancing Supply and Demand in a Changing Market

A mismatch between the types of properties available and those in high demand could shift market pricing. More buyers are searching for smaller houses and larger apartments due to affordability challenges, while average household sizes have been declining for decades. The aging population and smaller family sizes are putting pressure on housing supply. Structural impediments, such as high transaction costs, keep some people in oversized homes while others struggle to find affordable properties when upsizing. Changes to the taxation system, like reducing stamp duty, could help free up existing housing supply and encourage people to buy properties more suitable for their current needs.