Property hunters value location over house size: Grattan Institute

Prospective home buyers are beginning to value location and security more than having a big garden or floor space, according to a new research report produced by think tank the Grattan Institute.

The news comes as the auctions market has continued to struggle a few weeks into the spring selling season, with clearance rates roughly in line with their performance over the past few months.

The Grattan Institute "What Matters Most" survey found that the number of bedrooms in a home ranks as the highest concern across all demographics, followed by safety for occupants, proximity to family and friends and the number of living spaces in the home.

Researcher and report co-author Ben Weidmann says the traditional idea that families want a large, detached house with a backyard isn't necessarily true, and that shifts in the population are leading to changes in the reasons people want certain houses.

"One interesting thing we found is around the idea of location. There tends to be this idea that people will continue to drive further out until they get that detached house with a yard, but that isn't the case. There is a mix of preferences here and they differ across the population," he says.

"Particularly, they change by age and household type."

The report found that older households tend to be focused on those location-type variables, such as being close to family and friends, while safety and security also becomes a priority as people live by themselves. Proximity to health services is also a factor.

Weidmann says the idea of having a larger house with a large number of bedrooms is now important to younger families.

"That was the only demographic that actually prioritised having a garden, whereas the other groups didn't put that first," he says. "We're finding that lot sizes are getting smaller but housing sizes are actually getting bigger."

Weidmann says as the population ages and more people wait to have children, the property industry will need to adapt. But he also says the construction industry needs to be dynamic, and shift to the needs of different areas – not just assume that one size house will fit all.

"It's definitely a case of priorities of different segments of the population seem to want different things. You might expect this to shift as the population changes and the overall kind of housing changes as well."