20
Mar
2020

Tiny Home Communities: The Future for Australian Housing?

The growing population in Australia is leading to a housing crisis. It seems like tiny homes are the answer to this problem, especially with the increase of tiny home villages or communities in the country.

On the most recent population count, the projected number of residents in Australia could amount to 25,563,789. While the country is not as heavily populated as other parts of the world, many authorities take the matter seriously.

The Population Problem

Australia currently has a problem with the shrinking workforce, which is mainly due to its ageing citizens. Therefore, the pressure is on to younger people. They need to contribute more, especially when it comes to personal income taxes. As a result, Australia turns to immigration, which helps offset the financial challenges.

Population growth, however, is not equal around the country. The introduction of a population policy may assist the nation where it will mainly focus on immigrant settlement in various regions outside the main Australian cities.

For the government, it is not the size of the population that matters. Instead, the attention should be on the features and distribution. Such a strategy may help retain people, as well as attract new residents to stay outside the city limits. Therefore, those places with the highest growth, including Sydney, Melbourne, and Brisbane, will feel less pressured.

The Relationship between Housing Crisis and Population Growth

When the demand rises, the prices increase as well. It is the reality in the economy and has turned into a sad truth when it comes to housing in Australia. As a result, many people choose to rent.

Some people cannot afford to buy the house they want, so they settle with the cheapest alternative. Unfortunately, it only results in moving to another home, which doubles or even triples their expenses unnecessarily.

In early October 2019, the Reserve Bank lowered the official cash rate of Australia. It was a record low of 0.75%, which should be taken as positive news for potential homebuyers. With the cost of borrowing lower than ever, consumers should be rushing to purchase a house. Unfortunately, it was not the case.

As the borrowing costs go lower, the house prices in the country have been climbing. For instance, Sydney and Melbourne jumped to nearly two per cent in September. After the rate cut, it is expected that the trend will continue, which is not good news for those who want to own a home this year.

In this scenario, it is easy to see why people deem Australia as the landlord’s market. A large contributing factor to this situation includes laws, particularly “negative gearing.” This law has encouraged mid- and high-income earners to purchase investment properties, along with professional developers in the country. Over time, the housing numbers began to dwindle, whether for rent or sale. The demand has increased, which also hiked up the costs and competition.

Along with having a landlord’s market, the incomes of the citizens are stagnant. While it is not always a problem, the increasing costs of renting and buying homes causes people to struggle with their bills.

Renters in Australia can only stay in a rental home for 12 months on average. The limitation creates uncertainty, especially for those who want to live in the same area for the long term. People can find places where they can afford the rent, but it is not a secret that moving to another house or city is expensive.

Currently, the number of Australians without a home has reached more than 116,000. Just like in other countries, there are various reasons why people are homeless. The biggest group of people who have no homes is in a severely crowded house, followed by those in supported accommodation. Others have a temporary place to stay in, and some go to other households to share accommodation.

Tiny Homes: A Worthwhile Solution?

Tiny homes have awakened people’s awareness of tiny living. With the housing crisis affecting Australians, people resort to renting. However, little homes can be a way to supplement the ongoing deficiency in available housing inventories all over the country.

Each week, thousands of people move to Australia, whether they are from another city or country. Most of these groups would reside in most major cities with already thick crowds. An even bigger problem is the rising housing prices, which helped spur an increase in the number of homeless people.

Tiny homes may not be the first choice available for most people. There may be other ways for them to combat the homelessness dilemma. However, small Australian firms and groups are creating villages where tiny homes exist. These villages or small communities, as the name suggests, are dedicated to the construction of tiny homes. They are designed for those searching for an affordable place to stay.

small tiny home community

What are Tiny Home Villages?

These so-called small communities are still far from dominating the whole country. The number of tiny homes in Australia is still low, but steady growth is undeniable. The dwellings are often 37 square metres in size at a maximum, although some have already increased their measurements a little. Compared to an average Australian home, which is about 240 square metres, these tiny homes are “tiny” indeed.

The small-spaced accommodation options are not exactly new. They have been around in the mid-2000s. In particular, the most popular tiny homes were in the US where they originated. They were used as houses for the victims of Hurricane Katrina back in 2005.

When the global financial crisis hit in 2007 to 2008, people’s goals included finding the most affordable housing option for themselves and their families.

Australia now has several tiny houses, and some of them are in an exclusive village where only these little homes exist. In 2005, fewer than 200 people constructed a tiny house in the country. Although it took a while for the concept to take off, many individuals were curious about it and its benefits.

In 2015, the demand for this type of accommodation grew unexpectedly. More variations existed and were accepted, especially the house on wheels that function mostly like a trailer attached to a truck.

Fast forward to 2019, and the market has become even more prominent. The most recent Industry Research Report showed that the annual growth rate of tiny homes increased steadily. Analysts have predicted that it will continue to intensify as residents now place more value on affordability and functionality with these little houses.

The lack of affordable housing in Australia is a national problem. Many people have felt the pinch for years, but others are just starting. Unfortunately, those with lower incomes have the biggest concern in the housing market. These people never managed to purchase a house, so they can no longer afford it now when the prices have already skyrocketed.

Meanwhile, rents are also expensive with most parts of the country costing half of the people’s income. As a result, these residents never have the chance to save so that they can create equity. The most at-risk group, according to a report, is comprised of single older women.

The tiny home villages are projects that also address sustainability, which is a significant issue in Australia’s housing options. Many homes in the country are large in size, which means they require huge amounts of resources. The houses need a ton of resources in construction, as well as maintenance and heating and cooling.

On the other hand, a tiny house only requires a few resources, both for building and running. Ongoing costs are low, especially in a tiny house village. The homes in the community are often connected to a renewable power system that can usually accommodate the whole neighbourhood.

These villages are also an excellent solution to the legality issues of smaller homes, especially house on wheels. There are only a few places where people can live in trailer homes, such as caravan parks or at the backyard of another family member. Unfortunately, the permanent locations of caravan parks are rapidly disappearing.

With tiny communities, people usually do not have land issues to worry about.

Who is a Tiny Home For?

Tiny homes and the villages where they are located are perfect for singles and couples. The key is to live minimally without a lot of possessions that can hinder a modest lifestyle. These accommodation options are also ideal for older people who may have inadequate superannuation funds. In many cases, they cannot afford a regular house, which is why they want an option where the costs are lower than average.

As the appeal of small-scale living sweeps the country at a fast rate, more builders and groups will continue to create these micro-sized dwellings. The houses require permits, but the builders often take care of the legal necessities. It takes away a lot of stressful work on the part of the potential resident.

At the same time, these villages offer more than just accommodation. They are usually located in smaller communities, which provide social benefits for the residents.

Fox Tiny Homes can help you get your tiny home dreams underway, get in contact today!