The Australian real estate landscape underwent some seismic changes in 2024, and they’re definitely leaving their mark on home design.
Homebuyers will no doubt have noticed that the last 12 months have shaken up the Australian real estate landscape.
This evolving situation has led to a range of new approaches and trends in housing, both large and small.
From size and budgets to layouts, here’s what’s shaping residential architecture across the country in 2025.
1. Affordability driving change
Budget constraints have become a reality for many Australians in a competitive housing market.
This has led homebuyers to look for designs that maximise value without sacrificing quality.
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Innovative home designs are changing the game in the Australian home building landscape.
Laurie Cosentino, General Manager of Domaine Homes, observes that shifts in the housing market are making buyers more selective.
“Buyers are increasingly open to choosing homes that align with their current stage of life and the specific needs of their families,” he says.
As a result, there’s been a rise in new homes that are compact and functional, situated in carefully selected suburbs with easy access to open spaces, public transport, schools, hospitals, shops, and restaurants.
However, Cosentino emphasises that quality is still crucial, and thanks to innovation, buyers don’t have to compromise on it.
“Advances in specification standards and modern manufacturing processes have enabled the mass production of high-quality materials that deliver significant value to buyers,” he explains.
“We have also conducted extensive research to identify the key design elements and features influencing homebuyers’ decisions.
As a result, we have revamped our design collections to better align with the needs and preferences of today’s consumers while keeping their budgets in mind.”
2. Size inspires innovation
Bigger isn’t always better, and there’s a noticeable trend toward smaller lots and narrower designs.
This shift not only addresses the practical needs of homeowners but also resonates with the rising interest in sustainable living, as smaller homes generally use fewer resources.
Cosentino points out, “Many of Australia’s leading developers are capitalising on opportunities in greenfield land developments by utilising a zero-side setback along one of the property’s boundaries.”
This approach helps buyers make the most of their space in the design.
Smart design solutions are making smaller homes more functional and enjoyable for everyday living.
3. Homes are reflecting our life choices
The makeup of Australian families is rapidly changing, which is having an impact on the home front.
“Domaine has observed a significant increase in demand for well-designed 3-bedroom homes that comfortably accommodate smaller families with children,” Cosentino says.
“Simultaneously, there is a notable rise in homes tailored for multigenerational living.
These larger residences are increasingly entering the market, featuring 6-7 bedrooms with ensuites, attached granny flats, or even 2-bedroom living quarters.
“This trend reflects a shift where two families may combine their financial resources to enter the property market together.”
4. Energy ignites better design
With growing awareness of climate change and environmental responsibility, energy efficiency has become a key factor buyers are looking at.
“PV solar systems with battery storage remain among the most sought-after features, offering homebuyers immediate and tangible value from the moment they move into their new homes,” Cosentino shares.
He adds that buyers can also choose a range of upgrades to improve their sustainability options, like double-glazed windows – and builders are making changes on the construction front to do their part, too.
“We prioritise waste management, ensuring sustainable practices by adhering to strict on-site material recycling processes,” Cosentino explains.
2025’s homes highlight the benefits of efficiency in today’s dynamic living environments.
5. Working from home
Remote work appears here to stay and has significantly influenced home design.
As more Australians embrace flexible working arrangements, the need for dedicated home office spaces has become paramount.
Cosentino says home designs in 2025 are expected to feature adaptable workspaces that can be easily transformed from professional environments to personal retreats.
“Nearly every home in our collection includes a dedicated study option or, at the very least, an IT nook designed to provide a functional desk and workspace within the home,” he shares.
6. Function and adaptability are key
Ultimately, functionality and adaptability are the most essential parts of successful home design in 2025.
With shrinking land sizes, the importance of functional home designs has become more critical than ever,” Cosentino says.
“Open-plan living remains a timeless favourite.
Modern homes are utilising clever design to maximise comfort and utility in every square metre.
With every new Domaine Home design, we prioritise incorporating open-plan living areas seamlessly connected to open-plan kitchen spaces, ensuring functionality and a modern aesthetic.”
But people are being adaptable when it comes to other features.
“Smaller family homes are adapting to include landlocked laundry areas and single-car garages, replacing the traditional double garage and conventional laundry layouts,” Cosentino adds.
“Meanwhile, multigenerational homes are incorporating larger alfresco spaces, and even secondary side alfresco areas, to maximise entertaining options and enhance outdoor living.”
7. Light interiors still popular
It might not surprise most, but light and bright interiors remain the top choice.
Despite international trends that embrace vibrant colours and personality through tile or cabinetry selections, most Aussie buyers still favour the classic white and bright interior design.
There seems to be a preference for white in big-ticket items, such as wall colours, while personality is showcased through soft furnishings like artwork, window treatments, and furniture.
However, when it comes to floors, Aussies are moving away from deep, dark timber shades.
“We’re observing a clear shift towards lighter tones, with soft timber colours and subtle stains becoming increasingly popular,” says Cosentino.
Additionally, there are other trends to consider.
“Flooring choices are leaning toward hybrid floor systems, complemented by extensive use of decorative rugs as a stylish alternative to traditional carpet,” he adds.
