Australians’ love affair with big homes may be coming to an end with a new Australian Bureau of Statistics report revealing that the average home size is beginning to fall from highs of 2008 and 2009. But is living on a smaller scale all it’s cracked up to be?

Everywhere you look people are re-evaluating their lifestyle choices and choosing to live more frugally – opting more for apartment living and renovating to add ‘green’ additions to the home. The credit crunch forced many former big-spenders into savvy savers and it’s a trend that can be seen in the housing market too.

Until recently, Australians have been in the habit of steadily increasing their square footage year after year. The average family home rose in size from 150 square metres in the mid-1980s, to about 220 square metres in 2008-09 – that’s a whopping 47 percent in just over two decades, according to the Commsec-commissioned study. The average size Australian home has since dipped to 214.2 square metres today.

The good news is that having a smaller living space can send ripples of savings throughout your lifestyle. Here are some ways a small home can equal big savings:

• Reduce debt
A smaller home may mean a smaller mortgage, which means reducing your monthly repayments. So you’ll be able to use these savings for other goals such as taking more holidays!

• Energy efficiency
Naturally, less space to heat or cool means smaller energy bills and if you’re in a smaller home, efficiency upgrades – such as new insulation or window coverings – may also cost less.

• Save on building costs
One of the most obvious financial advantages of a smaller home is that it’s cheaper to build; fewer materials and square footage can result in reduced costs compared to bigger homes.

• Hoard less
It’s easy to accumulate lots of stuff and the more rooms you have in a home, the more we seem to find to fill them! Having a smaller area encourages more thoughtful and purposeful purchases, so you’ll be forced to cut back.

• Cheaper maintenance
Finally, all homes require ongoing maintenance – from a lick of paint to new carpet. When there is less area to cover, there’s less expense involved in these inevitable tasks. With these savings you’ll be able to accelerate repayments on your mortgage and pay down debt more quickly or reward yourself with that holiday.