Perth house blocks in new developments shrank by 9.2 per cent over the year to September, with the average size of a block sold declining to 415 square metres.
Twenty years ago only 8 per cent of blocks were under 500sqm, but this year blocks sold under 500m2 represented 70 per cent of lots.
Urban Development Institute of Australia chief executive Debra Goostrey said housing affordability was supporting the trend toward smaller block sizes.
“In a nutshell, people are giving up the big backyards either through lifestyle choice or affordability constraints,” Ms Goostrey said.
“House prices in Perth shot up dramatically last decade from $205,000 in 2003 to $470,000 just four years later and this pushed home ownership out of reach for a number of people in Perth.
“Over this period, the ratio of the cost of the house and the land reversed from 2:1 to 1:2, driven by greater complexity in land development. With today’s smaller lots the ratio is around 1:1.
Ms Goostrey said the affordability of small lots appealed to first home buyers as well as baby boomers.
“The over 65 segment is expected to increase twice as fast as the rest of the population in WA, so affordable, small housing is creating opportunities for home owners to downsize and realise the capital in their existing large home,” Ms Goostrey said.
The suburb with the smallest average block size in 2013 was Kwinana town centre at 200m2, followed by Butler at 225m2.
The suburb that sold the most small blocks under 500m2 this year was Harrisdale, followed by Alkimos and Wellard.