New buyers fit the mould

One of the common criticisms of first homebuyers made by older generations is that their expectations are too high.

The perception is that plasma televisions, multiple bedrooms and large lot sizes are regarded as standard features by many young first homebuyers.

Yet according to BGC Residential chief financial officer Anthony Kinder, it’s not the fault of the building industry and its marketing activities, but rather the building covenants set by developers that are largely to blame.

“The reason we advertise that stuff is because that’s the only thing you can actually put on those blocks of land. The covenants are designed, in a lot of cases, so that you need to have a house that’s 160 square metres with a double lock-up garage. You’ve actually got to design a house that will fit all these requirements, and you’re not going to have a house that’s 150sqm with three bedrooms. You might as well have four, but the [high] price accompanies that,” Mr Kinder said.

“There are blocks that are smaller, cottage lots that are designed to have more affordable houses on them, but the cost inefficiencies of building on smaller lots don’t make it actually that much better. So one of the things we’re looking at in the industry is to enable builders to go and operate at lower levels of covenant requirement.”

Mr Kinder said that, provided the amenity of an area and its built form was preserved, smaller lots of 110sqm could be adopted. 

“From a builder’s perspective, by just removing that [requirement for a large lot size], we can shave about $30,000 off a package. That means we’ve only got to find another $50,000 from the land developer, and we’ll get back to an affordable housing model,” he said.

In addition to covenants on land, other building regulations are imposed by the Building Code of Australia, produced by the Australian Building Codes Board.

The latest edition of the code, which comes into effect this week, mandates everything from door handle height to design guidelines for home theatres.

Peter Stannard Homes managing director, Peter Stannard, said he believed building regulations were compounding the problem of affordability.

“The Australian Standards are building us better houses that people can’t afford,” he said.

“If you look at what the cost of housing was, and how it’s gone up, a large percentage of [the cost] has gone in because covenants have been put on.”