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Wise investors don't buy McMansions

Eight years ago I published a real estate book titled “Buyer Beware”, in which chapter 3 discussed the folly of the building industry pumping out four- and five-bedroom McMansions when households were getting steadily smaller. I dubbed Australia The Land of the Spare Bedroom, having estimated there were six million surplus bedrooms in the nation.

The situation has got worse, not better. Home builders have persisted with big houses, in defiance of demographic trends and the ability of families to afford houses that have got larger and more expensive.

Now the building industry is paying the price for refusing to adapt to society’s changing patterns. The Housing Industry Association and the Master Builders Association are the loudest whingers in real estate, bemoaning the lack of new home sales and pointing the finger of blame at various levels of government.