Analysis of realestate.com.au data shows COVID-19 has noticeably increased how much more people are paying for large homes relative to smaller ones. Owners of three-bedroom or larger homes have been the biggest winners in the upswing in prices over the past year.
With people spending more time in their homes in 2020 and an increase in working-from-home flexibility, many have reassessed what size home is right for them. This has accelerated the long-term trend towards larger dwellings across the country.
More people are searching for large homes
COVID-19 led to a large share of people working from home throughout 2020. While many of the effects of the pandemic are slowly receding, one lasting change will be more workplaces granting work-from-home flexibility. In response, many people, particularly CBD office workers, are reassessing how much time they will be spending at home and their need for more space, such as a home office.
Over the start of this year the share of searches for three or more bedrooms has increased, at the expense of smaller dwellings. This trend has been seen for both house and apartment buyers, so hasn’t been limited to buyers looking to move to more regional areas.
While almost all property prices have increased over the past year, the premium people have been paying for larger dwellings has also increased.
The price difference between three or four-plus bedroom houses and one-bedroom units has increased by about 12% since the start of the pandemic. By comparison, the premium for two-bedroom units has increased by only about 3%, so owners of larger dwellings have definitely been the big beneficiaries over the past year.
As more employers finalise remote working arrangements, many people will reassess their need for a larger home and the trade-off between commuting distance and the amenity of where they’re living.
Source: Owners of large homes the biggest winners in post-Covid property price swing, Paul Ryan, Realestate.com.au