There's many reasons why I'm wondering this question.
1) My kids are 10 and 7. I currently have a 5x2 with 2 bathrooms, double garage, huge games room 2 dining area's, 2 lounges, double garage and bbq area. I think it's about 350sqm, 816sqm block. We currently use about 2/3 of it. Mortgage free. We purchased about 7 yrs ago, and for an extra $10,000 we ended up with a property about a third bigger than other properties on the market. Although it was bigger than what we required it seemed like a good tax free investment.
Before that we lived in a 3bed, 1 bathroom, about 90sqm, no garage, outside ent area 1600sqm block. House was way too small - It was definately a happier household having more space and less time mowing.
We'll be living interstate for a couple of years, and may possibly come back to this house. I found having the extra space i ended up with more furniture and cr%# then we need so I've changed that habit. I think furniture can be choosen wisely to elimate wasted space in homes.
2) I've been looking for properties to add value to. I see a 400sqm block as a tiny block, but for some, it may be good sized block. I want to hear other opinions as I may be writing off desireable features as undesirable. I found a property in need of a reno today, desirable location, 4x1 - 70's style 400sqm block.
3) I've also been thinking about my parents upgrading from a 3x2 to a 4x2 when us kids were teenagers. Now there is only them, and they say they will end up no better off downgrading after stamp duty and selling fees - which I tend to agree.