The Australian 'castle' is the smallest it's been in 17 years, as we trade McMansions for apartments

• Average house sizes have been shrinking in Australia to now be at their lowest point since the turn of the century, according to the latest CommSec report.

• The average house built last year was just 228 square metres, down from nearly 250 in 2009. The average apartment was 128 square metres, up from the year prior but again, well down on 2009 peaks.

• It marks a multi-year decline and takes property size averages back to 2001 levels. Economists Craig James and Ryan Felsman put it down to a trend towards apartment living in capital cities, as Australians trade size for proximity to amenities.

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"A man's home is his castle," a pensive Darryl Kerrigan once declared.

These days however the Australian castle could be described in far more humble terms, having been reduced to their smallest size in 17 years, according to the latest data profiled by CommSec.

"Seven years ago, Aussies were building the biggest detached – [or] free-standing – houses in the world. But in the period since, Aussie home buyers have embraced apartments as well as smaller houses on smaller lot sizes," economists Craig James and Ryan Felsman who compiled the report said.

"There are still McMansions being built, but there are fewer of them. Now houses being built in the US are the biggest in the world, around 5 per cent bigger than in Australia."

That puts our national house sizes at their equal lowest point in the 21st century, even as prices approach all-time highs. The average house built last year came in at 228.8 square metres, more than a square metre smaller than the year prior.

Interestingly, over the same period, the size of apartments have actually grown, as Australians are increasingly drawn to them. The average unit grew 3.2% over the last year to stand at 128.8 square metres.

"Generation Y, Millennials, ‘down-sizers’ and small families want to live closer to work, cafes, restaurants, shopping and airports and have been giving up living space for better proximity to the desirable amenities," James and Ryan noted.

That's led to the average home size, across all property sizes actually lifting off two-decade lows.

That's not to say apartments are the biggest they've ever been. They're actually on average 14 square metres reduced from where they were in 2009.

Ironically, it is in Australia's smallest territory, the ACT, where houses remain the biggest, ahead of Victoria, Western Australia and Queensland.

"Only 21% of ACT dwellings in 2018/19 were houses. But those houses averaged 251 square metres – the biggest in Australia. Victorian houses built last year were 246 square metres – the biggest in seven years," the economists noted.

Meanwhile, one of the country's strongest economies, New South Wales, has managed to go backwards. The size of its apartments have plumbed 20-year lows, while its houses are now 10% smaller on average than those south of the border in Victoria. Houses in Queensland and Tasmania have followed suit, down at two-decade lows as well.

Despite that, it's important to take the data with a generous grain of salt, according to CommSec.

"Not only are houses far bigger than those built in the 1980s and before, but the standard of fit-out today is far superior with higher quality kitchens, bathrooms, floor coverings and inclusions like air-conditioners."

That's not to mention a notable absence of fibro and asbestos on modern construction sites.

So things are looking up, even if they're looking smaller.