UNSW: Tiny houses are a gimmick

Amid all the propaganda claiming that tiny houses are a genuine solution to Australia’s housing affordability woes, an honest assessment has been delivered by Dr Laura Crommelin from the UNSW City Futures Research Centre:

“The challenge with housing affordability is not just the cost or size of the [house] itself. The price is [mainly] in the land,” Dr Crommelin says. “If it’s a [genuine] house, presumably you need some land to put it on, and that has to come from somewhere and be paid for somehow. You don’t solve the land problem by replacing a different type of house with a smaller, tiny house.”

The researcher also argues that apartments are still likely to be a more economical use of space than a tiny house.

“You can fit more apartments on a piece of land than you could tiny houses,” she says…

The researcher also has concerns about the equity issues that come with tiny houses. “If it’s made such that a certain segment of the population … that’s all they can aspire to; you’re essentially saying that they don’t deserve normal-sized housing like everyone else. That’s a real concern because there’s no reason why we couldn’t have decent-sized housing for everyone”…

Dr Crommelin says that changing the current investment model of housing would be a more sensible approach and would directly address the housing affordability issue.

“We have built a housing model built around speculative investment, mum and dad investors, and all of that contributes significantly to inflating the housing affordability issue,” she says. “We could eliminate the tax breaks that support housing investment so that it might become more affordable to enter the owner-occupier market.”

Spot on. Tiny houses are not a genuine housing solution because there is no land ownership attached and they don’t address Australia’s exorbitant land prices.

Tiny houses are effectively caravans rebranded to sound trendy.

Caravan parks have existed for generations in Australia and have been the prime dumping grounds for the disadvantaged and borderline homeless. Yet now, spruikers are marketing these as a genuine housing solution for Australia’s disenfranchised youth.

Instead of marketing gimmicks, Australia needs genuine housing policy solutions that tackle both demand and supply-side distortions. These include:

  • Curbing tax breaks that encourage property speculation;
  • Slashing immigration levels;
  • Removing artificial barriers to residential land supply;
  • Boosting investment in public housing; and
  • Making rental tenancy laws more secure.

Policy makers must address these issues before stuffing Aussies into caravans.

Leith van Onselen
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Comments

  1. The horse bolted long ago on negative gearing. With interest rates at current levels and investment lending still down its hardly the issue it once was.

    Rampant immigration is the current issue.

    • Not really. I mean most immigrants are not cashed up — they are predominantly students, as this blog reminds us on a regular basis. The issue is interest rates. There are no normal circumstances in which any sane individual or organisation would lend a bogan $500,000 at 3.69%.

      What we have is central banks fixing policy rates at ridiculous levels and a banking system that can create unlimited amounts of credit based on these low policy rates. That’s it. Nothing else.

      Unlimited credit meets limited land supply and prices rise?! No way!

      • Chinese investors are inflating housing markets in the US, Canada, and Australia

        At first, the inflow of Chinese investor money was great and awesome. But then it turned the local markets into full-blown housing bubbles

        https://www.businessinsider.com/china-investors-inflating-housing-markets-in-us-canada-australia-2018-6/

        One-Third Of Vancouver’s Real Estate Market Is Owned By Chinese

        https://www.fortunebuilders.com/one-third-of-vancouvers-real-estate-market-is-owned-by-chinese-buyers/

        • John Howards Bowling Coach

          Canada is so woke they will sink into the swamp soon. That PC fool they voted in as their PM have to grow some balls and stand up for Canada.
          In other News we need to find a PM who will also stand up for what is best for Australia as we’re already in the swamp, awaiting Canada joining us.

      • Wrong. Go speak to some recent Chinese immigrants. They buy houses in Australia because they are “cheap” compared to China (where they also only own the land under leasehold). A lot of them would not bat an eyelid dropping AUD$ 1mill on a property. Also some of them come here to obtain citizenship via investment- these are not low wealth individuals

        • John Howards Bowling Coach

          Correct. I read some seriously misguided comments on here regarding the migrants from China. A close friend works in that market, much to my dismay and protest, and I see a massive queue of wealthy Chinese with more money than you can imagine, lining up to buy up their chunk of Australia. No issues with smuggling their $millions out of China despite capital controls, and to them the $millions they will pay for property here is easily digested. The majority of Chinese are still dirty poor like the majority in India, BUT the number of wealthy is as large as our entire population and then some. Chinese coming here are NOT POOR, those here who think we’re still the destination for those seeking a better life because their life sucks back home are blind and can only see the tiny number of actual refugees who are allowed in versus the tidal wave of those coming to buy up our entire nation as quickly as they can with their dirty money.

        • We’ll have to agree to disagree. You’re welcome to believe whatever you wish – it’s a free world after all 😉

    • billygoatMEMBER

      Tiny meaning: very small.
      “a tiny hummingbird”

      A tiny house is a flat / apartment.
      A flat /apartment is a tiny house.
      A tiny house is a home
      A flat / house is a home
      We all should live in tiny homes …tiny nests just like a hummingbird cos they’re tiny. Imagine how many hummingbird nests would fit inside the average tiny flat???
      $$$ to be made. FMD imagine how many houses / tiny homes we could export overseas ie sell to newly minted migrants if they built them hummingbird size. If a hummingbird can live in a tiny nest then people should live in tiny homes.
      I hope I don’t make any sense ..just like tiny houses #stupid

  2. It would be nice to see a breakdown of the factors that have contributed to appreciation of land value since a time at which that value was far more reasonable. What is the mix of natural population growth, immigration, immigrant population growth, investment properties, scarcity due to other land uses, et cetera. Not sure how we can properly seek to curb the issue without properly understanding the root causes. Does this analysis exist?

    • the root cause is the mass Third World immigration program.
      it is driven by greedy neoliberal ideologues in an unholy alliance with the social engineering progressive ideologues.
      it is simple, however discussion is taboo.

  3. Such life changing population growth needs a national debate and referendum. The current undemocratic policy is changing the nation forever. Some say for better , some say for worse.
    But to not allow a debate and analysis is treasonous.

    ( PS The Australia, banned that comment )

  4. TailorTrashMEMBER

    “Dr Crommelin says that changing the current investment model of housing would be a more sensible approach and would directly address the housing affordability issue.”

    That is the crux of the matter ………until houses get back to being homes they will remain the chips for those with the dosh
    ………such a shame idiot labor didn’t get in last election and make a start on that road .

  5. John Howards Bowling Coach

    Tiny Homes are an overpriced scam. If you really want a cheap home, get some skills, buy a piece of land in a rural area and build on it yourself. I could build an actual house for the cost of a “tiny home” and have a large piece of land in the country.

    In fact you can probably buy a house in a rural area for less than a tiny home, then learn some renovations skills and turn the place into something you are comfortable and happy living in.

    • Probably, but unless you can afford to buy it on newstart, you might have a problem.
      Why do you think it’s so cheap in the first place.

      • John Howards Bowling Coach

        Agreed the job opportunities are fewer, but there is opportunity in this life to create something for yourself if you have a bit of drive. Australians are accustomed to handouts and that include someone giving you a well paid job and benefits, sometimes I feel our nation would head back towards a better path if more people here would do something and build something for themselves.

        • Jumping jack flash

          “Australians are accustomed to handouts and that include someone giving you a well paid job and benefits”

          Assuming that debt is still required to purchase even the cheapest property and then pay someone to build even the quickest and nastiest house imaginable, or, if by some chance you attempted to build it yourself then materials and tools would still be required and they are expensive, what will we use to repay the debt to the bank?

          Do we offer them sacrifices? Give them 10% of our crops? Perhaps bestow upon them our children to use as slaves?

          Don’t get me wrong. My parents did exactly this, but they sold 3 properties in Sydney and then moved to Nimbin to “retire” before I was old enough to remember.

          It was no problem for them to build a nice house as my father was a builder, and the proceeds of selling up his Sydney portfolio bought the materials and tools for our “Hippy Shack”

          But the important thing to take away from this was that it was hard. Very hard. And he also had 3 properties already.

  6. Tiny houses are effectively caravans rebranded to sound trendy.

    Next will be “tiny caravans”!

    • John Howards Bowling Coach

      I think they are also more expensive and heavier than a caravan, imagine the fuel you’d burn moving one of those things about the place.

  7. Jumping jack flash

    Tiny homes are great and they are certainly the future. What else could possibly occur?
    By 2050 the average house price will be $10M. Are we all going to live in highrise? I doubt it. The idiots building them can’t stack two bricks on top of one another without them falling over!

    The problem is that we’re thinking about the Tiny Homes all wrong.
    We’re thinking of Tiny Homes in terms of them being relocatable, or caravans, etc, etc. This is one way to think of them. Similar to the US “trailer parks”. It is fraught with stigma and all the rest.

    The other way to think of them is a tiny house and land package!

    Along with your Tiny Home, you actually get a piece of dirt to call your own. Not much bigger than the home itself. A metre or two around it would probably be enough. Enough for one of those retractable clothesline thingies.

    Anyway, if they changed the way they think about the Tiny Homes to include land as well, then we’ll be onto a winner!
    It would solve so many problems!

    Any struggling mortgage slaves who own close to a “standard” housing block could possibly get approval then to knock down their house and subdivide their standard block into 4, 6 or 8 Tiny Home-sized housing blocks.

    They would instantly become “Property Developers” which is what any serious investor aspires to become. They would earn hundreds of thousands of dollars which they could use to repay their debt and if they were smart, they’d save one of the Tiny Home-sized blocks for themselves to build their dream home on.

    Aspiring debt slaves who earn 78K in 2050 are in no way imaginable going to be able to afford anything close to a standard detached house at a cool $10M after a few doublings after 7-10 years and all that. The answer is a fully detached Tiny House and Land Package!!

    You could probably pick up one of those for around $1M, well within the reach of someone earning 78K in 2050, which will STILL be the average full-time wage.

  8. billygoatMEMBER

    Watch the price of a 50 year old Sandman shagging wagon go through the roof. F**k tiny houses tents & cars. Buy yourself a $500 swagman and camp out settler style. A step up from homeless cos of label cred. All the private school boys have them for B&S balls & pig shooting weekends with country cousins. Afterpay just like a mortgage but shorter. Live like a King!!