Why Tiny Homes Are Perfect for Young People
For most of the younger generation, particularly millennials, renting is the primary housing option for them. In Australia, the number of renters continues to grow year on year and back in 2016, the census showed there were almost as many Australian renters as those who owned a home.
About 31% of the population owns a property outright while 30.9% were renting. Approximately 26% of the housing stock was comprised of flats, semi-detached homes, apartments, or townhouses. During that time, there was less than one per cent of Australians who lived in a caravan, tent, or cabin.
Even with the small percentage, experts knew that Australians were looking for a more flexible option for housing.
Meanwhile, in a new report, the Australian Bureau of Statistics showed that, on average, about 20 to 30 per cent of the people’s weekly income goes to rent. It is easy to see why many millennials find it difficult to afford a home in the country despite the real estate industry favouring consumers.
Lifestyle, income, and expenditures – whether expected or unexpected – play an important role in determining if a person can afford to buy a house. Unfortunately, millennials believe that the pleasures of owning a home are out of their reach – at least for now.
For those who struggle to afford a deposit and mortgage, there is an alternative in the shape of a tiny home. A misconception is that they are simply for older people who may live alone or even those who want to get rid of their worldly possessions.
However, tiny homes are for everyone, including young people. Regardless of your budget and preferences, you can find a tiny home that meets your needs and wants.
Financial Freedom Offered by Tiny Homes
Compared to traditional homes, tiny houses are incredibly affordable. Australian homes vary in prices depending mainly on the location and the size. For instance, in Brisbane, the average cost is around $550k while Perth is a little less expensive at $505k.
If you are interested to shop for some houses in Melbourne, expect to see properties that are around $793k. In Sydney, it is even more expensive with the median price going over $955k. On the other hand, a tiny home can be as cheap as $20k.
Even when renting is much more affordable, people want a place that they can truly call home. Tiny homes have become the solution for those who wish to purchase a house without going over their budget. No matter how small the budget is, you can find a tiny house for you.
Aside from the initial cost to build, you will not worry about mortgage payments. One of the reasons why Australians get into debt is a mortgage. It is why some people opt to rent to avoid borrowing money to purchase a home and get into financial traps.
Often, millennials are already in debt due to their studies. With fees to pay for university, it is not easy to find additional funds. It is why tiny houses are an efficient way to prevent rising levels of debt.
Young people today recognise the fact that we are living in uncertain times. Financial crashes can happen at any time. For them, it makes sense to have a place where they can stay and keep them warm, even if it is a movable home. Many millennials have parents with gardens where they can easily get planning permission to build their little home.
Another real financial-related problem these days is that many young people have bad credit. They tend to have poor spending habits, causing them to forget about saving for the future. In the end, they cannot afford to purchase a house not just because of their crippling student loan debt but also their inability to save.
If you have bad credit, it may not be possible for you to get a loan unless you get one with high-interest rates. You can quickly end up with even more debt than before. Thankfully, tiny homes have a much lower price point. It is why some millennials can even purchase them without the help of the bank.
For many young people, the prospect of such a dauntingly large and long term investment such as a mortgage is not an inviting prospect. The initial deposit is one thing, but also the risk of entering the property market during financial instability can mean a potential loss. It’s easy to see why a tiny home can be an attractive prospect to those just finding their financial feet.
Freedom and Independence
A big benefit of living in a tiny home is that you can hitch it to a vehicle. Then, you can drive it until you get to a new location. Young people crave freedom in various aspects, including the ability to go anywhere. Sometimes, it is not possible to go from one place to another because it means leaving the house behind even for a while.
With a tiny home, it will no longer be a problem. Whether you want to move to a new spot, go on a holiday, or transfer for work, relocating is much easier with a tiny home. You do not have to pack up some suitcases. You can drive and keep everything with you. It is less stressful, and you get to see a new place without booking a hotel room to sleep in for the night.
Tiny homes are built in a variety of ways, and you can find one with solar panels and even rainwater collection. They are often designed for those who want to live off-the-grid for a while. Others allow parking at any spot because of the small size. Of course, there are also tiny homes that are similar to traditional ones where you still need to hook them up with water and power.
However, it does not matter which design you prefer. The potential mobility makes tiny homes beneficial for anyone, including families, freelancers, and people who may need to relocate frequently.
Reasons Why Millennials Prefer Tiny Homes over Traditional Houses
Many millennials now understand their responsibility to preserve nature for future generations. They continue to look for ways on how to help reduce their impact on the environment. Living in a tiny home is a sure-fire method of taking care of the environment since it helps reduce carbon footprint.
The amount of resources needed to build a tiny house is not as huge as those needed for a traditional home. Therefore, already the impact on the environment is greatly reduced.
Aside from the mentioned benefits, there are even more reasons why millennials would choose a tiny home to live in:
Literature and documentaries have shown that minimalism is cool. It is currently a the forefront of many design trends. The financial payoffs are significant because you do not need to bring a lot of your possessions with you. Since you live minimally, it will cost you less. Tiny homes even offer an opportunity to keep everything organised and tidy.
- Fewer Costs
Still related to saving money, you do not have to worry too much about your power bills. With the increasing costs of electricity, experts believe that it will continue to rise in the next few years. A tiny home is a wonderful investment. It may not eliminate your power bills, but you can minimise the costs since you will have fewer appliances. Additionally, you can even live off-grid using solar panels. Unlike a traditional home, you will not need several panels to get the energy you require daily.
- Worry-Free Future
If you wish to relocate, it should not be a problem if you live in a tiny home. A conventional house has permanent foundations. Therefore, you cannot take it with you when you need to move to another city for work, for instance. It means you need to purchase a new house or even rent, leaving your old home behind. With a tiny home, you have a movable structure that you can take with you. In short, you can take your investment with you anytime and anywhere. It makes this housing option a lifesaver for those who need to move.
Living in a traditional house, you may end up just buying more items to fill it. With such a large space, so you can keep adding more products and furniture – even those you do not need. Tiny homes are smaller, so you cannot take everything with you. You will be more prudent with space and therefore only bring the items you need, which help in keeping things neat and tidy.
Young people are also not huge fans of cleaning. With the tiny space, you do not have to spend a lot of time, effort, and even money when cleaning the house.
Are Tiny Homes the Solution to the Housing Crisis?
There are many benefits to going small. There is lower money involved, including in the down payment and mortgage. Property taxes are also one less thing to worry about. Also, tiny homes require less time and money for maintenance. In the next few years, more potential homeowners will be around. It will be easier for you to sell the house with many buyers looking for a tiny home.
House prices keep rising, not just in Australia but in most of the world. There seems to be an enduring crisis when it comes to housing availability and affordability. For most people, what they need right now is an alternative housing solution that they will have no problems with, especially with payments. It should be cheap and if possible, free from mortgage.
It may take some time before we learn whether or not tiny homes are the answer to the housing crisis. However, these small dwellings can have a huge impact on the real estate market. The country requires more homes every year and statistics showed that there is not enough in existence right now.
The Australian Bureau of Statistics released data that confirmed the drop in new residential construction from December 2017 to 2018. It is a possibility that tiny houses can be used to solve this issue. However, there are planning restrictions that need to be addressed, including the size of the dwellings and the rules that govern them.
Tiny homes are so much smaller than a traditional home. Therefore, they are not considered real homes, but more like an extension of a trailer.
In reality, tiny homes should not be expected to solve the housing crisis in the country or even in other parts of the world. There are other solutions available, although they can involve more in-depth planning. Additionally, they can be quite expensive, unlike with tiny houses.
Some people may even move in with their family, friends or find flatmates to save on the costs of building a new home, as well as the other expenses. Most families, however, opt for this method because it helps them save a lot of money. However, living with other people means that you may have to be mindful of the living arrangements of those whom you share the house with.
Although Australia may not experience a housing market collapse anytime soon, a large portion of the country finds it difficult to buy a house. There may not be a significant shortage of homes as of the moment, but there will always be the affordability challenge, especially in the urban areas.
In the end, there is no single solution to this problem. As many buyers struggle with housing costs, it is clear that coordination with the government and individuals is crucial. Private developers and the whole community should cooperate as well.
Tiny Home Communities for Young People around the World
There are now numerous tiny home communities in existence all over the world. Millennials are looking for a place they can call home without causing them to go bankrupt for the next several years. Tiny homes are more affordable and easier to maintain. Even better, you own it when you buy it.
It is why it is not surprising that many people want to live in a tiny home community. These communities have dwellers living side by side in their small houses. Some of them are great for young people or millennials. Here are some of these communities:
- California, US
A new community is currently adding more tiny homes just 18 kilometres outside of San Diego in California, USA. It is a small village that now consists of 50 houses with private yards. These yards are where small space dwellers live.
The small village has a farmers market and appealing landscaping with vegetables and fruits. The community promotes sustainability. The houses even have solar panels to further reduce the overall footprint.
- Texas, US
Another tiny home community is in Texas, in a small town called Spur. It is said to be the “nations’ first tiny house-friendly town.” It is a great opportunity for young adults who want to be away from the city noise.
It is important to be aware that this area has sparse employment opportunities. The town is best suited for seniors and retirees. However, it does not mean that you cannot join the community. If you are planning to set up your own business, you are more than welcome to do so. The cheap commercial real estate market may help as well.
Before you visit or even think about packing your bags and going on a trip, you must know about the rules here. A particularly significant rule for small homes in the area is that it should not be natural. Therefore, if your home is made of straw, clay, mud, or other related material, you will not be allowed to enter. Also, your tiny home should have a strong and adequate foundation.
- Oregon, US
Another city in the US is Eugene in Oregon where there are affordable tiny homes. Known as the Emerald Village Eugene (EVE), the project will give sustainable homes to people with low income. The youth struggle to find jobs and keep them these days. With the help of tiny houses in this community, the residents will only need to pay a few hundred dollars to become a member of the cooperative.
They will also pay for utilities and maintenance so they can live in a tiny house in the future.
- Tallinn, Estonia
A completely mobile tiny home community is in Estonia with surrounding houses around it. Most of them are small as well. The houses in this area can be unassembled and reassembled if the owner wants to relocate. The community is nearby a café and other businesses. There are offices as well, so the younger generation that may be looking for work will not find it difficult to do so.
These communities do not have too many rules. As with more traditional neighbourhoods and suburbs, as long as the other residents live in harmony with one another, there should not be any problem.
Every payment you make goes to you and not someone else like the landlord. Going small has a lot of benefits with some that are listed above. Living small means there is more freedom. You have the time and money to spend on things that you love.
If you think tiny home living could be for you, Fox Tiny Homes have a range of designs to choose from to help you get your feet on the housing ladder.