COMMENT: A story in our news feed last week said a new $400 million development in Bondi Junction will bring 100 new homes to the market.  Hurrah!

But wait a minute – that means the apartments will have to cost an average of $4 million each, just to break even.  And since developers are in business to make a profit, many of them will cost a lot more than that when they come to market.

It’s all about a trend – or maybe it’s just a slogan – called right-sizing. The idea is that instead of labelling it ‘down-sizing’ when superannuated retirees move from their empty nest McMansions – ‘down’ is such a downer – we call it ‘right’ which puts a positive glow on it all.

But the essential information is that people whose families have flown the coop are converting their under-used houses into generously proportioned apartments with a bit of cash left over for holiday cruises or the kids’ and grandkids’ mortgages.

As a result, report by real estate giants McGrath shows, the number of bedrooms and size of apartments in new luxury apartment developments is on the rise.

“After identifying the emerging rightsizing trend in Australia back in 2020, there has been more than double the delivery of apartments with three or more bedrooms, and the average apartment built was one-third larger,” said McGrath’s National Head of Research, Michelle Ciesielski.

By 2028, 40% of apartments in prime regions of Melbourne and Brisbane will be delivered with more than three bedrooms, 34% on the Gold Coast, and 31% in Sydney, according to McGrath research.

The same report says that many of these third bedrooms will be vacant much of the time, there for the occasions when family or friends visit.

In other words, we are building more empty rooms in apartments that first-timers can’t possibly afford.

It costs more to build eight one-bedroom apartments than four two-bedroom apartments in the same space.  And it cost less to build three, three bedroom apartments on that shame concrete slab.

So if the money is out there to luxe it up – and it surely is – what else would you expect developers to do?

This is what happens when we let the market, solely, dictate housing policy. The trend will always follow the money and there just happens to be more moolah in larger, more luxurious apartments.

That’s why renters and low income owners are being kicked out of buildings full of multiple affordable units so they can be demolished to make way for blocks with fewer, much more expensive apartments.

They call it “right-sizing” we call it “gentriviction” and if they aren’t game to build the homes themselves, it’s time the government stepped in and created genuine, seriously attractive tax breaks for developers who build affordable homes for people who will actually occupy the rooms available.

The wealth gap is increasing in Australia and nowhere is it more evident than in housing. It’s a shame that we can’t “right-size” the courage and vision of our politicians.

A version of this column appeared in last week’s Flat Chat newsletter. You can sign up for free below.