ScoMo takes huge dump with “tiny homes” push

Nothing makes my blood boil more than “tiny homes”. Whether it is the buyers or sellers of the sardine cans, acceptance of their existence represents a gigantic failure of the Australian political economy.

Those Millennials that Domain so loves to quote as they gasp out a few words from diaphragms crushed between kitchen cabinet and bed, that they love their tiny home, are the political failures of their generation.

Those establishment champions that see “tiny homes” as the answer to the disenfranchisement of generations from home ownership are straight up psychopaths.

So when I see this I reach for the revolver:

The Morrison government wants to make tiny homes a bigger deal.

Industry Minister Karen Andrews, a self-described fan of tiny homes, says she wants to see the prefabricated building sector grow by $30 billion over the next five years. The sector currently makes up about three to five per cent of Australia’s $150 billion construction industry, but Ms Andrews says it could grow to 15 per cent by 2025.

The Industry, Science and Technology Minister will announce a study on Sunday which will look at ways to develop the prefabricated building industry.

The study will examine safety issues, regulations around prefab buildings and export opportunities, particularly in the Asia-Pacific. Prefabricated construction involves any part of a building (such as the floor) or a whole building that is made off-site. This includes modular constructions for homes and offices and tiny homes.

The government has set aside $2 million for the initial study and then plans to set up an innovation lab to help manufacturers design prefabricated buildings.

Ms Andrews said there was a “massive opportunity” to boost the building and construction industry and potentially create an estimated 20,000 new jobs.

How have Australian values become some so warped that this makes sense to anybody? In the least populated land mass on earth we have to build literal shoe boxes to house our kids. It is basically proposing to ghettoise entire generations of future Australians as trailor trash.

And for what? To protect the fattened bankers, builders and ScoMo’s Property Council mates of the generations before.

Houses and Holes

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the fouding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

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  1. arescarti42MEMBER

    Prefab buildings are a great idea.

    Given Australia’s high wage costs, I’ve often wondered why low end houses here tend to be built on site, rather than in a factory where they can be made more cheaply, quickly and to higher standards. I’ve often admired how they build homes in Japan – big companies like Panasonic and Mitsubishi make homes there the same way they make cars and TVs.

    • Of course if we do offshore house building we then we can proudly ring the bell on any form of productive activity. Anyone for coffee?

    • Agree, id take a well located, well built tiny home on titled land over a poorly built apartment that comes with cladding and structural problems, body corporate costs etc.

    • DominicMEMBER

      It’s inevitable isn’t it — the building industry here will simply eat itself as someone else, offering a better value, superior product muscles in and scoops a big share of the market for themselves.

      And then watch those puss1es run to the Govt, demanding protection from the competition.

  2. I wonder if this awful cnut Karen Andrews lives in a tiny home? Or Scomo? I would imagine not.

    I have a revolver if you’d like to borrow one. Actually I have a swag of them. They’re old school, but good. Happy to share.

    • For other people, that is. Real houses like real jobs are for their offspring and the inner(jerk) circle

  3. The idea of tiny homes is to buy a big block or rural land somewhere, plonk a high quality and custom made small home made from recycled materials on it, and live sustainability. Plenty of land to grow your own veges and low energy needs and cheap land costs make it an enviable approach for some.

    • Agreed. Also means you fill it with less useless stuff.

      But tiny homes are only good where they are a choice, and where the choice is lifestyle/sustainability.

      Not where you are actually left with no other option because you are priced out of anything else. ie no choice at all.

    • Another sickening thing about current planning rules which are allegedly based on “saving the planet”, is that it is very difficult for many people at all to choose semi-rural, off-grid sustainable living. The high priesthood of the de facto established national church – of Gaia – has deemed that humanity must do penance by living like battery hens.

      • But the only people that have to pay penance are young people and those yet to be born. Or poor people or those without rich parents.

    • Ronin8317MEMBER

      The idea of ‘tiny home’, for the land developer, is to buy a a big block or rural land somewhere and put 1000 tiny homes on it.

      • The irony is that if planning rules allow them to do that, they will have to pay a lot more to the rural land vendor in the first place. It is not “developers” capturing the zero-sum gains here (unless they have banked the land and obtained upzoning at minimal legal cost).

    • BubbleyMEMBER

      Let’s be honest with ourselves.

      The only reason anyone chooses a tiny home is because they can’t afford a full size one.

      We are creating a trailer park culture for our youth.

  4. hmm, there might be method to the madness here. You build thousands of affordable tiny homes in the outer suburbs (think how many you could squeeze onto all those blocks of land in Tarneit) for all the uber and deliveroo drivers earning $9 an hour. At least they’ll be warm and dry because pre-fab seems to be better than a concrete dogbox/death trap.
    And the virtue signalling part of my brain is thinking that it’s basically a shanty town, but nicer because of the gardens, so that it’s not such a culture shock to the new arrivals.

    The more I think about it, this is a sure fire winner.

    • There is an important principle of land economics that needs to be understood here.
      “Land rent” will tend to rise to swallow any “slack” created by regulatory and economic conditions.
      Home ownership will not become easier because of low interest rates, for example, because house prices (land rent, actually) merely swallows the input of the low interest rates.
      The same thing happens with allowed density, or allowed cheapness of construction. Under the way our property markets are rigged by prescriptive planning, all that can be expected is that home size and quality will be shrunk. The same rip-off prices “per unit” will continue to apply.
      Every truly affordable housing market (see Demographia, median multiple 3) actually has large family homes as the median housing unit to which the multiple of 3 applies.
      No high density housing market has a median multiple of 3. The correlation tends to be the higher the density, the MORE, not the less, the typical household can be gouged for the typical housing unit. Hong Kong’s median multiple is 17. That is not a cherry-picked outlier, it is right on one end of the trend line. Atlanta with a median multiple of 3 and density 95% lower, is right on the other end of the trend line.
      Urban land rent is highly elastic, in the opposite direction to that on which the “planning” FRAUD is based.

      • You only have to look at retirement villages to see that principal at work. Even in cowboy towns you can pay 300k for a poorly built prefab shack,:then have to pay $150++ per week land rent and “defered” costs when you move on.

      • Another fact: in median-multiple 3 cities (all in the USA) they actually have these tiny homes on offer too. Complete package of serviced lot and new home comes to $60,000 usually. It’s a genuine option for some. What it is NOT, is a fraudulent substitute at the same $450,000 price, for the lavish multi-bedroom family home that should be what you get for $450,000.

  5. kannigetMEMBER

    There is a Use case for Tiny homes, I personally could not live in one full time but throwing one on a bush block I visit occasionally make sense. There are lots of little residential estates that are covered in “mobile” homes and the residents of them seem happy enough. What used to be the caravan park is now the mobile home park. Its ok for some people, and I could do it for a month or 2 over summer as long as the cooling beach was nearby and the general atmosphere was cordial to the odd evening of raucous fun and frivolity.

    But to opine that its a solution to the home affordability issue indicates the entire government needs to see a psychologist on a regular basis, possibly even a psychiatrist and get some medications proscribed.

    Oh, and $2 Million into research around the concept wont even get the right typeface chosen for the report…..

    • $2 Million into research around the concept wont even get the right typeface chosen for the report…..

      Haha, so true, so true. You’ve worked for a government dept at some point right?

      • kannigetMEMBER

        I would like to think I have been avidly trying to prevent this kind of “efficiency” in a number of government departments during my time with them. I dont tend to last long before I move on as either I deliver too early or they get tired of listening me tell them how they could do it better….

    • Many have been thown out to make way for something more profitable. They have to abandon their homes if they cant find anywhere else to move it to.

  6. I’ve thought about buying an acre or 2 Futher out of the city. Using a tiny home to live in whilst I build my own home (out of mudbrick or similar) I think there is more 2 tiny homes than just being trailer trash. They also offer freedom from debt and interest payments. Not to mention can be easily sold on when outlived their purpose.

    Can’t blame Millenials for wanting a way out.

    Colleague of mine owns a Kings Cross apartment which is really 1 bed (old art deco home) it’s worth maybe $800k. She now has 2 kids in it.

    For some reason a $50k tiny home seems like not such a bad idea by comparison. I agree though that it’s the result of housing policy failure though..

    • Yep, it’s an indication of total and systemic failure. In the same way that eating the tongue of your shoe is a viable option when starving.

    • It is sickening that the market can’t just sort out a variety of housing options and employment location options, between “living in a dog box” and “going fully rural”. The classical urban density curve and land rent curve was “gradual” for perfectly logical reasons. Now you get 20 units per acre on one side of a planners line on a map, and 5 acres per unit on the other side of the line.

      • Yep, and what could have been a beautiful mix of parklands, environmental lands, and other great surrounds is turned into a soul-destroying postage stamp dog-box development next to an ecological desert cow paddock (that is really just a land-banking lobbying operation). Incredibly frustrating!

    • Yep Tiny homes allow Millennial’s to take baby steps on the so called Property Ladder.
      Without Tiny Homes how would they ever get a foot hold in the Property Market?
      And more importantly how would their Betters elders ever sell that big house for big bucks? /sarc
      Stupid is as Stupid does!

    • bolstroodMEMBER

      Gav, you would do better to erect a tin shed, on concrete slab with services , then line vermin proof, and insulate it, put in windows and doors as required ‘
      A very comfortable, dwelling.
      I have done this on an older metal frame and clad shed at my place. costs $20k (9×6 mtres) Water, power, (No Bathroom or toilet)

      • StephenMEMBER

        I have an older colleague who has a property out in the sticks in northern NSW that he and his wife plan to retire to in a couple of years (from Brisbane). He’s done that kind of thing – had a nice big shed installed and built it into quite a nice house. They use it as a weekend/holiday retreat at the moment.

        I think it’s either two bedroom plus a big living space, bathroom and garage, built for less than $100K I believe (but a lot of labour on his part!).

    • kannigetMEMBER

      My Brother lives in a ramshackle collection of old caravans on my fathers land in the country. Dad wont share the 3 bedroom house with him for “personality clash” reasons and my brother cant afford to rent anywhere either.

      I hate to admit it but he has a little “trailer trash” about him at the moment.

      • No! Don’t be so harsh on him. He has a whole PORTFOLIO of trailers.

        He’s not trash. He’s an entrepreneur.

  7. Also from Minister Karen Andrews:

    “Frontal lobotomys are good, they free up your mind from all that laborious and difficult thinking. Everyone should do this… Except me.”

  8. Tiny houses are like new housing estates and dog-box units. The executives that make/sell them wouldn’t be found anywhere near them.

    • BubbleyMEMBER

      Or we could just call them what they are – Trailers like they have in America. A single or a double wide.

      We are a step from creating 8 Mile as a social norm. Cue the music M and M.

      • Ah, but they’re NOT trailers. In the same way that a latte is not a coffee. You can’t sell them as “unique” and “so me!” (adjectives that are highly attractive to millennials who like to customise their possessions and themselves) if they’re something as pedestrian as a trailer.

      • In most cases, probably more like half of a single wide, but yeah. With an espresso machine. Built in.

  9. kiwikarynMEMBER

    Look, tiny homes are nothing more than SJW virtue signalling. Millenials are into them because they can instagram their tiny home and scream “look at meeeeeeee, I’m so environmentally friendly/doing something about climate change/rejecting materialism/[insert current fashionable reason here]. Its got absolutely nothing to do with the cost of housing, otherwise they would have all been living in trailer park mobile homes a long time ago.

    • Interesting point! You could be right. I thought it was about them finding their own portable free-stander, no matter how small, a more me-me-me!!! customisable dwelling (appealing to the common Millennial desire for self-and-possessions customisation and uniqueness). But I do believe small-footprint virtue signaling is part of it, too, now that you mention it.

  10. A cheaper house just leads to more of the property money being spent on land. It does not solve the affordability issue as we have a land bubble in Australia, not a housing bubble.

    • You are exactly right. That’s what I said in a longer comment above. No housing market in the world has become cheaper in correlation with shrinking housing unit sizes. The land inflates in price far faster than housing space is traded off. If you compare real land prices between cities, it can literally be 1000 times higher in a city that is 10 times denser. The end result is an average housing unit price several times higher even though it is several times smaller.

      It is easy to find comparisons in rental adverts between UK cities and US ones, where you get a 1/4 share in a single room in the UK city, or perhaps a crawl space under some stairs or in an attic; and you get a whole decent townhouse in the US city, for about the same real money.

  11. Systemic failure; don’t try to bandaid over it, please…

    People should have the choice to have a tiny home, not be forced into it by being priced out of the market due to insanity upon insanity.

    Fix the system instead of promoting tiny homes.

    • kannigetMEMBER

      What Is interesting with this is that 99% of local councils are dead against allowing you to have a tiny home if you want one, and our government are pushing to make it the only option for those who dont want it.

      • Yes, that’s what’s puzzling to me. I think I will end up in a tiny home for some part of the rest of my life, hopefully on my own land that has another large home I’m renting out (shh, don’t tell the bank) or whilst I’m building my own home. But I’m quite sure the councils in the areas I’ve looked, don’t seem too friendly toward tiny homes.

  12. This story reads to me like a prefab policy trying to ride the tiny homes fad. They are unrelated. The tiny home builds on endless TV shows are predominantly not prefab and predominantly awful.

    There are amazing full-sized prefab homes to be had around the world with superior design and performance. Australia is a laggard, as usual.

      • BubbleyMEMBER

        The pricing on those pre-builts starts at $220,000 for the most basic 2 bed 1 bath. Most are around $320k – far beyond the reach of the tiny house crowd.

      • darklydrawlMEMBER

        Oh yes Bubbly. These are not for the tiny house people. Rather they are full sized and quality pre-fabs (which have some advantages over the more usual ‘tradies on site’ housing construction). It was more to provide some starting points for 800psi to explore re: decent prefab options in Oz.

  13. Mr RobertsMEMBER

    I live in a tiny home and love it. It is a lot of work to keep up the lifestyle, but 1200 acre properties in all directions are worth the payoff. Built with piers, hardwood, glass and flammable cladding. Cost 2k as most was out of waste from sites I was working on. I don’t own the land – will leave the dwelling when I split. Works for me, cheaper than rates, no neighbors, amazing 4g internet.

    • “…built with flammable cladding”


      I’m trying to figure out if you’re serious or being ironic?

  14. Hanno Son of Bomilcar

    these are just trailers rebranded for the eco-conscious and middle class strivers

    • Actually, the parallel here, is the large middle class in India, with good qualifications and a good job, who still live in illegal slum housing – because the “formal” market is so rigged and corrupt. Apparently early every morning in many Indian city slums, a whole lot of people emerge wearing decent suits and carrying briefcases, heading off to work.

      Pommyland has been the first developed nation to revert backwards to third-world-nation housing markets (thanks to their 1947 Town and Country Planning Act), but Australia seems to be trying to set new records for the speed at which it is possible to get to London-style housing injustice after decades of median-multiple-3 normality.

      • Mass immigration is a slum developers dream…with some locals mixed in these will be great vibrant areas of diversity…just imagine a suburb called “Vibrant Indo-China” where pets.go missing daily!

      • That’s similar to how when I lived above a pub, in the morning half of us would bounce out of the pub in our business clothes, carrying our laptops. (But when I got to the office, my teammates would tell me, you really shouldn’t tell people you live in a pub… it’s considered down-scale. Nevermind that it was enabling me to afford saving up a home deposit until I was kicked out due to unsafe construction near it, and market priced conventional units don’t allow for that.)

  15. This sounds like the townships I saw when I went to South Africa.
    Outstanding. So this is what my western Sydney will become.
    At least if we follow how South Africa did it, we will all still have satellite tv while living 6 to shed bedroom.

  16. lol is that desperation or napalm I smell?

    those prices ain’t gonna stop going down.

  17. The best solution is to make access to land free. This is how it was meant to be and is easy to achieve. Ditch all taxes and instead collect the annual rental-value of sites privately occupied (including resources extracted) as the sole source of public revenue. This will bring the transfer price of cadastral lots to nil, plus the value of improvements. This is ethical as the land was given by Creation, not made by humanity — all land price is theft from Creation, first peoples, the community (which generates land value, not the registered proprietor!) and future generations. People who profit from land price are no better than people buying ‘cheap’ stolen goods from the fence at the pub. Landowners who “lose their land value” are justly losing proceeds of crime to which they were never entitled. No economy, no civilization can be based on theft. Let all losses simply lie where they fall. Let the banks fail as their stolen “securities” evaporate, never to be replaced, with no bail-outs or bail-ins; and in future ensure the separation of domestic from merchant banking. Let local communities form credit unions. Thus land will be free to all, so welfare dependants & workers will be able to build own homes, grow own food, have solid bargaining power (no need for unions), form local intentional communities.

  18. gbuckleyMEMBER

    The new suburbs around canberra are all on tiny blocks of land now already – like 250sqms. and cost half a mill, just for the dirt.

    basically these are mini mansions – built to the fence lines with the eaves crossing over from the place next door.

    its madness. I think Tiny is a sound solution for a lot of people, but the land prices are the real issue. also all the planning BS.

    Nothing wrong with living more sustainably and minimalistically. How many empty bedrooms do we have nationally with houses?

    Id much rather bespoke tiny house on my own plot of land than a flammable death trap with no natural surroundings.