Big House Prices? Why Tiny Homes May Hold The Answer
In the first of our new series exploring exciting spaces and the everyday Kiwis who inhabit them, we’re taking a look at why tiny homes may be the answer to New Zealand’s housing affordability crisis.
Rising house prices are more than a little frightening for any aspiring homeowner.
The latest update from the Real Estate Institute of New Zealand (REINZ) found that the median price in New Zealand was an eye-watering $615,000. That’s an 11.8% year-on-year increase.
With household incomes in New Zealand struggling to keep up with soaring house prices, it’s yet another demoralising hit to any aspiring first home buyer. For many Kiwis, the dream of owning a home continues to slip out of reach.
Kiwis are nothing if not up for a challenge. A new generation is starting to think outside the box or, as the case may be, within a smaller box, to find new, innovative alternatives. One option that’s grown in popularity over the last five years is tiny houses.
Tiny homes are simple, spacious, and allow you to skip that little old thing known as crippling, lifelong debt. Inspired by the possibilities, today we’re taking a look at four reasons why they may be the solution for New Zealanders looking to break into the property market.
1. The upfront investment is far lower
A 20% deposit on a $615,000 home is $123,000. For families and households who aren’t yet in the property market, saving that much can be a challenge. Especially when rent, food, insurance, and a host of other expenses are eating up your income.
That $123,000 is just the deposit, as well.
Let’s take a quick look at the upfront cost of a tiny home. Take our own 17m2 Pods as an example. Pricing starts at just $26,995. That’s less than ¼ of what you’d expect to put forward for a deposit on an average home in New Zealand.
2. You’ll enjoy a lower cost of living
According to Stats NZ, Kiwis spend an average of $17,227 a year on housing costs.
With the average annual income sitting around $52,000, that’s a substantial amount!
There are also other costs to consider, including utilities like water, power, internet, gas, and so on. Add these figures together, and there’s a lot of financial outlay just to keep the lights on and the WiFi steady.
So, how does that compare to tiny home living? Well, The Tiny Life website took a closer look at this topic in one of their recent Blog Posts. They found that “68% of tiny homeowners in the United States have no mortgage, compared to the 29.3% of homeowners.
Owning your own tiny home helps keep household expenses low. The cosier floor space means electricity, power, and water bills aren’t as high. Tiny homes also inspire a more mindful way of living, so you’re unlikely to fill the space with throwaway electronics that sit around and drain power.
3. They cost less to maintain and renovate
Sometimes it isn’t the cost of the house that cripples homeowners; it’s the upkeep that comes with it.
Super Renovations provide a great overview of the costs associated with renovating a standard home in Auckland. Yes, they’re guidelines for one New Zealand city, but take a look at the quoted prices for the various jobs. These things add up quickly.
With a tiny home, there’s less room for big financial surprises. Maintaining and looking after them doesn’t require the same time and energy as a regular home would. It’s not going to take a full day to get the household chores done or tens of thousands of dollars to paint the roof.
Remember those old Mitre 10 ads that said “big is good,?
If you want to save big on maintenance, we think “small is good is the way to go.
4. You’ll have more financial freedom
Imagine the sense of financial freedom, you’ll feel if you’re not waving goodbye to thousands of dollars every month on costly rents or expensive mortgages. We’ve always believed that tiny homes inspire you to live a big life!
Are you saving for a holiday? A big-ticket purchase? Or just craving a sense of financial security? As we’ve explored above, tiny homes aren’t anywhere near as expensive to buy or maintain. Your disposable income goes up as your expenses go down.
If you’re saving for a deposit, going small helps hurry those plans along. It opens up new opportunities to live life a little differently. A little outside the box. To live it your way.
With a tiny home, big dreams become a reality
Whether you’re a first home buyer, looking for an investment, or just wanting to downsize, a tiny house may be the way to go. We hope you found this article helpful, and encourage you to check back later for more as we continue to explore the spaces where Kiwis live, work, and play!