Prefabricated tiny homes could help fill housing gap in Sydney amid rental crisis

With the number of newly built properties diminishing each year, one housing expert has suggested an ‘out of the box’ way to prevent homelessness.

Life inside a tiny home.

The head of an industry body has called for a rethink of the way Sydney’s rental crisis is being handled as the number of new building starts looks set to decline even further.

Prefabricated rental properties, tiny homes and opening up spare rooms for rent in retirees’ properties are a few out of the box options that could help fill the gap in the short term while more properties are being built.

Could prefabricated tiny homes be the answer to the rental crisis? Picture: Tim Carrafa.

It comes as unaffordability soars and renters look for new ways to overcome a chronic lack of housing.

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A recent post from a renter on a Facebook forum ‘Sydney Inner West Housemates’ urged for a household with a big backyard that could accommodate her “self-contained, off-grid, tiny house on wheels.”

Master Builders Australia CEO Denita Wawn.

“A GREAT CHANCE TO EARN EXTRA $$ IF YOU HAVE A BIG BACKYARD!” the post read.

Master Builders of Australia CEO Denita Wawn said there were a range of long term solutions to the lack of housing, such as build-to-rent schemes, that could help create more homes and stabilise prices for renters and purchasers in the process.

Finding a solution to help in the short term, however, proved a much greater challenge.

“In the short term, the difficulty is we’re constrained by the current supply of housing,” she said.

“There’s an interesting debate to be had around prefabricated homes, tiny homes and having the capacity to do more of that in existing titled land.”

Caravans could be a short term way of filling the supply gap. Pics Adam Head.

She said the ageing population that weren’t choosing to downsize could be offered incentives to open up their spare rooms for rent, such as the additional income stream not affecting their pension.

“There are some really interesting debates at the moment about how as a community we can be smarter in supporting those around you in finding appropriate accommodation – but in ways that are not going to adversely affect your own lifestyle or implications on pensions, or whatever the case may be,” she said.

She said the government has acknowledged Australia needs to build 200,000 new homes a year between 2025 and 2030 in order to meet demand.

“Currently, looking at forecasting for this financial year, we’re only going to do about 170,000 homes.”

There are many companies making tiny homes.

She said NSW alone needed 60,000 new homes built each year during this period. Despite this, forecasting suggested just 51,000 homes would be built this financial year, with numbers to drop to 50,000 each year before hitting 45,000 in 2024-25.

The shortfall in existing housing has already led to rents surging across Sydney and much of the country.

A recent report from Savvy found more than 42 per cent of low income earners were in rental stress with students in share houses paying about 40 per cent of their income on rent.

Share houses are becoming more common. Picture: Josie Hayden.

Savvy managing director Bill Tsouvalas said the rental crisis was “spiralling out of control,” and would continue to do so as more migrants entered the county.

“More migrants simply means we need more homes, but with a lack of housing supply the problem will continue well into 2023,” Mr Tsouvalas said.

“The antidote to easing the pressure is through housing investment, which can help increase the build-to-rent-market.”

But Ms Wawn said the issue was a Catch 22.

“Part of the reason why rents and property prices are so high is we don’t have enough homes,” she said.

“The flip side is we’re not going to build enough homes in the future. Cost of building is so high because of inflation and with rising interest rates you’ve got a lot of people that are not wanting to invest in the market.”

She said states and territories as well as local councils needed to be held to account for high developer charges and planning constraints that were proving roadblocks to boosting supply.

“This is not about increasing the margins for developers or owners, this is simply about making the numbers stack up,” she said.

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Originally published as Prefabricated tiny homes could help fill housing gap in Sydney amid rental crisis