Here’s why the tiny house may be the key to living mortgage-free
With the economic conditions in Australia, is now the time to downsize to the tiny house?
Many young families, couples, singles, and retirees are jumping on the tiny house wagon as it provides an affordable housing solution. It has recently become a popular option for downsizing retirees rather than moving into a retirement village.
With the rising cost of living and building materials skyrocketing, living debt-free and having little expenses has become attractive and a necessity for many people. The tiny house presents the perfect alternative to affordable housing and sustainable living, particularly for women over 55 years, alarmingly the fastest-growing demographic for homelessness in Australia.
Factors such as the rise in the aging population, rising housing prices, rising rental prices, relationship breakdowns, and low levels of superannuation have caused a surge in over 55s becoming interested in tiny homes, either for themselves in retirement or for their elderly parents, and that number is steadily rising.
But what is a tiny house, and is it better than other housing options?
The tiny house movement sweeping the world
The tiny house movement is a social movement that advocates for a return to simple living. This means owning fewer things, minimalism, and leaving a “tiny” footprint by downsizing one’s living quarters, reducing ecological impact. It’s seen as an eco-friendly way of living, and in Australia, due to the housing affordability crisis, it has become an affordable alternative to traditional housing.
The tiny house also appeals to those who have a sense of adventure as many are transportable like a caravan.
History of the tiny house movement
Various versions of tiny homes have always been around, particularly for working families during the Depression era and earlier. Still, the tiny house movement as we know it began during the great recession of 2007-2009 when it provided affordable housing for the many homeless in many cities around the United States. Many of these homeless lost their homes due to foreclosures when the expensive housing bubble burst. Tiny houses became an attractive option because they were quick and easy to build, affordable, and cost as little as $3,800.
The movement grew so much that there are now TV shows and YouTube channels dedicated to showcasing families, singles, and couples of all ages living and thriving in tiny houses.
The tiny house movement gained traction in Australia when Designer Eco Tiny Homes, the nation’s most prominent tiny house builder, opened its doors. There are now several tiny house holiday rentals available all over Australia for holidaymakers and those wanting to trial run tiny house living. Local councils are also starting to recognise them as a viable housing solution, and some laws and regulations are being passed to try to regulate them. There is now also a dedicated tiny house subdivision recently opened up along Victoria’s scenic Great Ocean Road called Titan Hills, the world’s first master-planned, ecological off-grid tiny home subdivision.
What classifies as a tiny house?
While granny flats are usually between 37m2 to 93m2, to be classified as tiny, the house must be less than 37m2. But the typical tiny houses being built these days are about 37-46m2. Tiny houses are frequently likened to an RV (recreational vehicle or motor home) as they are roughly the same size and transportable.
The main advantage of a tiny house over a granny flat is that it is (for many of them) built on wheels and can be moved to a different location. Also, a granny flat, modular or prefabricated (“prefab”) home will all require formal council approvals and application. This can add to the overall build cost, not to mention the time it takes for a build to be approved. Being on wheels means a tiny house is not classified as a “building” and can avoid the regulatory hurdles that come with granny flats, prefab, or modular homes.
And because they are like caravans, you don’t need a special permit to tow them, just a suitable vehicle to handle the load. If the tiny house is under 2.5m wide and not higher than 4.3m, they are good to go on Australian roads.
For these reasons, a tiny house is attractive as an on-property addition for accommodating returning adult children and aging relatives or used as a home office or guest house. Once they are no longer needed, they can be sold or transported to another location.
The cost of building a tiny house is generally cheaper than a granny flat too. However, higher-end tiny homes can cost just as much as a granny flat.
Advantages of the tiny house
The tiny house’s main advantage is that the home’s size means it costs less to build, run and maintain. Amazon, for example, is selling a 15m2 tiny home starting at just under $60,000.
It uses far less electricity than a typical house and can be operated off-grid using solar panels. For comparison, a tiny home can be sustained on 914 kilowatt hours per year, while an average house requires about 12,733-kilowatt hours per year.
Also, because it requires a radical downsize as they’re so small, you can’t be accumulating a lot of material possessions, which minimises consumer spending (and is better for the environment too).
Some tiny homes also have incinerator toilets, where waste is burned rather than flushed. Some come with a composting toilet, which works by decomposing the waste. Tiny homeowners can save a significant amount on water costs by getting rid of the flushing toilet.
Many tiny homes are also built using recycled or upcycled materials such as unwanted shipping containers, which further reduces the cost of building. And in today’s economic climate, where building materials are skyrocketing, building a tiny home out of salvaged materials is an attractive option.
One other advantage is transportability. For example, they can be towed out in the event of natural disasters such as floods and bushfires.
For these reasons, it’s perfect for those with very little savings or little income, such as young couples, singles, and those over 55 years.
Disadvantages of a tiny house
The main disadvantages of the tiny house are finding a place to park it and zoning laws. Many are on wheels, so they are legally classified as RVs and unsuitable for a permanent dwelling. Also, some councils require a permit to have them in your backyard.
You will also need to adjust to a minimalist lifestyle, which means you constantly have to rethink your possessions and may need to forego some creature comforts.
Some say that having a tiny home is not classified as an asset as the property value is tied to the land. So owning a tiny home will not produce wealth for you and is likened to owning a caravan where it may just end up at the tip at the end of its life.
Also, the cost may be prohibitive if you don’t have the money to purchase it. Unlike home loans with low-interest rates, you will need to apply for a personal loan to buy a tiny house, which attracts higher interest rates. Another major hurdle is finding a legal place to set up the home.
However, these disadvantages usually affect young families, young couples or singles. They are virtually non-existent for retirees. Retirees are generally cashed up from the sale of their homes, and if they have kids, they can potentially park the tiny house in their kid’s backyard.
Council approvals and fees and where to park the tiny home
Different States and councils have different rules for tiny houses, but most requirements have to do with size and where you can park it. It’s best to check the local council’s regulations before you get started.
Most tiny houses are built on wheels, so the rules for caravans would generally apply to tiny homes too. If the local council is unaware of the tiny home, use the term “caravan” when making your inquiries, as the rules for both are generally interchangeable.
As for where to park the tiny house, there are many options available. Because of the growing tiny house movement in Australia, a few tiny home communities, such as Titan hills, are starting to open up with affordable fees. Some people also rent their driveways and backyards for tiny home dwellers to park in, as there is no permit required because they’re classified as a caravan. Although check with the local council as there may be limits on how long you can live in a caravan. Tiny Real Estate provides a listing of where you can park your tiny house. There are also plenty of caravan parks all over the country that can take in tiny homes.
Are you looking to downsize?
If you are looking to downsize and thinking of selling your home, call us on 0401 396 088 or 0450 914 535 for a free, no-obligation appraisal of your property.
