Brokers see surge in tiny home demand

As the housing affordability crisis continues to bite, more prospective buyers are looking into alternative housing solutions, one of which are tiny houses.

Speaking to The Adviser, finance specialist at Great Escape Finance, Jamie Mitchell, shed light on whether or not demand has increased among Australians looking for tiny houses.

“For the moment, I’m doing at least one [tiny home loan] a week. There has been [an increase in demand], and part of that’s been our marketing strategy as well,” Mitchell said.

“My general manager is the former treasurer of the Australian Tiny House Association, and we’ve always presented at any of the tiny home expos around the country.

“There’s definitely been an increase [in demand] for us, I’m getting more builders on board all the time. There’s many, many more builders that are looking for finance, so, I can say categorically there’s definitely more interest in tiny homes.”

In regard to whether or not tiny homes can help with Australia’s current housing supply issues, Mitchell stated: “I think it absolutely has to.

“We need to be looking at alternative strategies at the moment and trying to help people with accommodation.

“Tiny homes are probably one of those things that we can [use] to help people. I think they present an affordable option to plenty of people.”

Zain Peart, ZEP Finance’s director and mortgage broker, said lenders that offer cash out are generally the ones that offer funding for people looking for a loan on tiny houses.

“Macquarie Bank has been great with cash out; Bankwest has certainly helped a fair bit. It depends on the property that people want to put tiny homes on as well. I find in my area those are larger properties,” Peart said.

“You’re looking at who’s taking that property’s security and where that goes. I’ve had parents give out money for their kids to buy a tiny home and they’ve put that on their own property.”

However, according to Peart, not everyone is successful in securing a loan: “I’m getting around four tiny homes [a week]. I’m getting a lot of calls about it but I’d say 50 per cent of those calls are people that aren’t in a position to be able to fund because you often can’t borrow on the tiny home.”

Asked if he’s seen an increase in demand, Peart said there’s “certainly” been a rise in interest for tiny homes and other “creative ideas for the younger generation” to try and buy houses or containers to sit on their parent’s property.

“You don’t have to buy the land, so it’s saving them a lot of money,” Peart said.

“I really think that these sorts of properties like tiny homes or relocatable or even modular home designs where it’s a lot cheaper and built off-site need to have policy changes so we can help Australia’s housing, because at the moment it’s not really easy to get a lot of these properties, but it will solve some of the housing issues.”

MoneyPlace national head of sales and partnerships, Matt Hall, said he’s seen more consumers start looking for “solutions outside of the norm”, leading to an uplift in the volume of brokers referring clients for loans on tiny houses.

“It’s people now looking for alternative solutions to extension, [renovations], and holiday housing. We’re also seeing a lot more businesses putting tiny house as short-term accommodation solutions as well,” Hall said.

“So, it’s not just your normal mum-and-dad buyer or a person looking to put a tiny house onto a block of land where they generally couldn’t get council approval for a dwelling, it’s stemming right across every asset class and every market.”

Hall further stated that there’s also greater awareness of the product itself now “than there ever has been” and that a key driver has been people looking towards a sustainable living arrangement.

“People are looking at it like it’s a unique way of living,” Hall said.

[RELATED: Brokers reveal how borrowers are faring with arrears]

Written by Adrian Suljanovic

Last Updated: 26 March 2024

Published: 27 March 2024