Several factors influence Australian property preferences, varying across different locations, and these are related to the size and type of the dwelling, as well as the number of bedrooms, bathrooms, and parking spaces. Here’s a breakdown of the key influences:

Family Needs and Lifestyle:

• The classic family home, featuring four bedrooms, two bathrooms, and two parking spots, is the most popular configuration in many Australian suburbs, driven by the need for more space due to the pandemic and the shift towards remote work.
• Larger homes with five bedrooms, three bathrooms, and two parking spots are favored by established families in affluent suburbs who prioritize space and proximity to quality schools.
• The desire for multi-generational living also increases the demand for spacious properties.
• Newly developed areas on the urban fringe tend to be popular with young families who value flexible living spaces and potential for growth.

Location and Urban Density:

• In inner-city suburbs, where space is limited and expensive, smaller homes with two bedrooms, one bathroom, and no parking are more popular, catering to first-home buyers, investors, and downsizers.
• One-bedroom units are also popular in CBD areas and adjacent suburbs due to affordability constraints.

Affordability:

• Affordability challenges are causing more buyers to look for smaller houses and larger apartments.
• The recent surge in unit prices is outpacing the growth of house prices, driven by the reopening of cities and ongoing affordability challenges in the housing market.
• Compact living is a necessity in areas where land is scarce and prices for larger homes are significantly higher. 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.

State-Specific Preferences:

• While four-bedroom homes are generally favored, Tasmania prefers three-bedroom, one-bathroom, two-park homes
• When it comes to units, the most popular configuration nationwide is two bedrooms, one bathroom, and one parking spot.
• In NSW and QLD, an extra bathroom is highly sought-after in units, 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.

Market Trends:

• The pandemic caused unprecedented shifts in housing preferences, with larger homes increasingly preferred over smaller options.
• The aging population and smaller family sizes are putting pressure on housing supply.
• There is a mismatch between the types of properties available and those in high demand, which could cause a shift in market pricing.

Other factors:

• 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.

so what types of houses are first home buyers seeking in ACT and Perth?

Australian Capital Territory (ACT):

• The sources indicate that ACT buyers lean towards smaller one-bedroom units. This suggests that first-home buyers in the ACT may be prioritizing affordability and are more likely to opt for smaller units rather than houses due to budget constraints.
• It’s also worth noting that in other areas, one-bedroom units gain traction in CBD areas and adjacent suburbs, where affordability constraints drive the demand for smaller, more budget-friendly options. This trend could also apply to first home buyers in the ACT, especially if they are looking in or near the city.

Perth:

• In Perth, the sources suggest that demand is strong for affordable suburbs and properties. This implies that first-home buyers are likely to be looking for properties in areas where prices are relatively lower.
• Demand for units, which are generally more affordable entry points to the market than houses, is also likely to remain strong. This indicates that many first-home buyers may be choosing units as their first property purchase in Perth due to the lower cost compared to houses.
• The general trend in Perth shows that the median house sale price was $745,000 in December 2024 and the median unit price was $500,000. This price difference could be a key factor in why first-home buyers in Perth may be more likely to consider units.
• Additionally, the sources mention that the greatest demand for rental properties is likely to be for homes closer to the CBD, lifestyle hubs, and key transport infrastructure. While this is specific to the rental market, it could be an indicator of desirable locations for first home buyers too, although they may need to compromise on size to afford these locations.