New houses in Australia's capital cities are being built on plots of land that are about 32% smaller than 10 years ago.
AAP reports Outlook for Residential Land, a report by BIS Shrapnel, says property developers are now producing smaller lots to encourage demand. The higher density of housing also boosts developers' revenues.
"Median lot sizes have shrunk by between 14 and 32 per cent across the capital cities over the last decade," said report author Angie Zigomanis.
"Developers have tried to keep headline lot prices lower in order to keep the cost of a new house competitive with the existing stock in the outer fringe suburbs, thereby encouraging demand for land," Ms Zigomanis said.
The report said that Sydney and Perth are leading the way as demand for residential land picks up.
In Sydney and Perth, years of low new dwelling construction had resulted in a deficiency of housing.
Also, houses have become more affordable due to weakness in house and land prices and lower interest rates.