As apartments grow to represent almost half of all homes built, the building trend in many states is to shrink the size of houses and expand that of units, townhouses and villas, data from the Australian Bureau of Statistics shows.

Australia is still building the second-biggest homes in the world behind the US, with a combined average of houses and apartments reaching 189 square metres.

According to the data, commissioned by CommSec, houses built in 2018 dropped to their lowest size in 17 years at an average of 228.8 square metres, which was 1.3 per cent smaller than the previous year, while apartments grew slightly to an average 128.8sq m.

CommSec says a growing population and a social push to live closer to local services and amenities is the driving force behind the change.

Demographic estimates from ABS also show the number of people in each dwelling is falling to 2.4 people.

CommSec's says this demographic reality - as well as the cheaper price of apartments and townhouses - is prompting older couples to downsize, while younger people have moved out to rent or buy homes that better fit their needs.

In 2017/18, the average weekly housing costs for all Australian households were $311, with significant variations for different tenure types.

These changes in housing demand and supply are leading to urban consolidation, with Australians giving up living space for better proximity to cafes, restaurants, shopping centres or schools.

The average home size in Australia has been falling over the past decade, but the data is different across different states.

Tasmania was building the smallest houses at 178.5sq m, but the biggest apartments at 159.3sq m.

ACT, in contrast, leads when it comes to house size at 250.8sq m, but also built the smallest new apartments at 102sq m.

On average, the biggest floor area of any home was in Victoria, at 212.5sq m.

Australian Associated Press