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A casual scroll through the real estate ads of suburban Melbourne reveals a popular feature: modern houses and renovations ... once considered essential in Australian homes—are disappearing.

A modern extension was added onto the house’s rear in 2004. The former Australian House Museum at Deakin University. Owners Cathie and Ian Ferguson have planted extensively in the garden.

Mr Rynne pointed to two key factors explaining why units were outpacing houses price growth: diversity of buyer type and supply constraints. Brendan Rynne is chief economist at KPMG Australia.