Australia is renowned for its wide open spaces, vast landscapes and livability, we now have also taken the title of the country of the “World’s largest homes.”

Here’s a startling but true fact…We are at the top of the leader board when it comes to square metres of living space, beating our traditional rival the United States.

As an investor you are probably thinking: so what are the implications of this for my property investing?

Data released by CommSec shows the Aussie home has increased on average by 10 per cent over the past decade, hitting a record of 214 square metres, three times the size of the avarage British home.

Interestingly New South Wales boasts the largest dwellings of all the states, with the average size of new homes built over 2008-2009 measuring a whopping 262.9 square metres, while Queensland housing came a distant second at an average 253 square metres. And at the same time, the average lot size has become smaller.

But it is unlikley this trend of ever increasing homes will continue, with affordability issues already scaring off Gen Y from the housing market and forcing many of them to stay at home longer with their parents. At the same time, we have a population set to double over the next few decades and changing demographics, with fewer people living in each household.

The key to being a successful property investor is to buy the type of property that will be in continous strong demand in the medium to long term, so as to maximise capital growth.

So a logical question to ask is...where are we going to house all these extra people and in what sort of dwellings are they going to live?

It has long been suggested by those in the property industry that building smaller, medium to high density dwellings around the inner city and transport hubs is the best way to prevent urban sprawl. This argument has been supported by recent town planning legislation from state and local governments, which encourages more compact, centralised development, such as townhouses and apartments.

Australia has traditionally lagged behind the rest of the world when it comes to adopting apartment style living as the norm. For instance in Europe the biggest homes are found in Denmark (a mix of houses and flats) where the average floor area is 137 square metres – almost half that of the average NSW house.

Coming in second is Greece, with 126 square metres and the Netherlands with 115.5 square metres. In the UK, where developable land is limited and flats are the most common type of housing, home sizes are the smallest at 76 square metres.

It’s not just our super-sized McMansions that are making headlines though, as the cost of renting in Australia is also on the rise. BIS Shrapnel have predicted that rental prices will continue to soar upwards in the future, with a forecast jump of around 5 per cent in per annum in most of our capital cities in the next few years.

While this may be bad news for tenants, it is of course good news for landlords who will pocket an extra $2 billion nationally during the next 2 years according to BIS Shrapnel. Not bad if you own the right type of investment property – medium density apartments and townhouses in the inner and middle ring suburbs of our capital cities.

George Raptis is a director of Metropole Property Investment Strategists in Sydney. He shares his 22 years of experience in the property industry as a licensed estate agent and active property investor. Go to www.metropole.com.au