Tiny homes, tiny dreams

Are tiny homes really ‘popular’?

I literally laughed out my nose when I read this the other day.

It was some article talking about the tiny-home movement.

Basically, you build a home on the back of a trailer so technically, you can call it a caravan, and circumvent the need for DA’s and all that hoo ha.

This article was saying in terms of price, $20,000 will get you something pretty basic, but premium versions can cost up to $120,000.

They’re homes in a sense because they normally come with everything a person needs – kitchen, sleeping areas, bathroom and toilet.

You know, like a caravan.

So we’re really talking about glorified caravans. Caravans are just proto-tiny homes.

But the quote I loved was this one:

“The tiny-home movement’s popularity can partly be linked to the growing interest in minimalism and following a simple, no-frills lifestyle.”


Are you kidding me? Tiny homes are booming because people prefer to live in caravans rather than real homes? Come off it.

Its like saying hobos live under bridges because they prefer the alfresco lifestyle and access to transport infrastructure.

Or, people catch trams to work because they prefer being squashed up against other office workers than driving their own car.

They’ve got the causality all backwards.

People aren’t choosing a compact minimalist lifestyle – it’s being forced upon them.

And it’s being forced upon them by a market that is offering fewer and fewer options to people at the bottom of the food chain.

And why is the market failing?

Because we’ve got more people than places to put them. The market is chronically under-supplied. It has been for years.

That’s partly because we’re not building enough houses. Partly because the population is growing too quickly.

I’m not going to try and unpack which factor is the dominant driver. I see economists arguing themselves blue in the face about it every day.

But make no mistake. If people are being pushed into living in a glorified caravan, it’s because there’s a shortage of housing.

And that means there’s effectively a floor under current price levels.

If prices fall, just a little bit, there will be someone currently priced out of the market who will be able to get in.

And it looks like there’s a huge buyer pool under the current market rate.

This buyer pool acts as a huge brake on any potential price falls. As soon as prices drop, just a fraction, there’s a buyer segment that engages and supports the current market.

In this environment, it’s very hard to see prices falling.

No matter how many TV shows want to go on about the “Great Australian Bubble.”

The tiny home movement is about forcing our young kids to accept tiny dreams, because the market is just what it is.

No two ways around it.

What do you make of the tiny-home phenomenon.

Spiro Kladis
Managing Director, Cashflow Capital

Facebook Comments:

Leave A Reply (2 comments so far)

  1. Leslie
    3 weeks ago

    As people get more selfish, and want all the (must haves in todays world) Places like Telstra take all their money that should be saved for a home.

  2. Mark
    3 weeks ago

    I agree with Spiro on this one!

    The problem of affordability is a big problem and living in Sydney i would say it starts here.You can still move one to one and a half hours from Sydney CBD and buy something affordable,it doesn’t need to be a tiny home on wheels. If this radius from the CBD still doesn’t accommodate your budget move to a state that does because they are still out there.I am far from a analyst and i do not know if we sit on a dramatic bubble waiting to burst, but for those who have seen the property clock normally something starting with a letter B follows a boom.