Insight

14.09.21  Lifestyle

 

The Tiny House Movement

The tiny house movement has changed many people’s attitudes towards small homes.

Now an increasing number of buyers in Sydney’s eastern suburbs are looking to the potential they offer.

Sydney’s eastern suburbs may have a reputation for harbour views, luxury homes, beachside living and Australia’s highest property prices. But, believe it or not, you might find a small but perfectly formed house right here.

Despite our reputation, Sydney’s inner-city suburbs, including Paddington, Darlinghurst and Surry Hills are actually home to some of the smallest houses in the entire country thanks to a large number of terrace houses. In fact, the narrowest house in Sydney is rumoured to be 43 Edgeware Road, Enmore. The entire place is under three metres wide.

Tiny homes are becoming increasingly popular with first home buyers, investors, and those looking for a city crash pad.

Smaller homes still exist

One of our key areas is Paddington, where we’ve made and broken many records selling amazing, large renovated terraces with four or five bedrooms and multiple living areas. But we also sell a lot of much smaller homes here that appeal to a completely different market.

According to the last census, 948 properties in Paddington have one bedroom, and 244 have no bedroom. Of course, many of these are apartments, including bedsits, studios and one-bedroom units. However, given that over 63% of Paddington properties are terrace houses, some of these one-bedroom properties are also actually one-bedroom houses.

This dates back to Paddington’s roots as a working-class area, with much of the suburb’s housing built in the Victorian era.

If you search realestate.com.au, you’ll see these types of homes are scarce and only change hands very occasionally. Those that have sold recently tend to have sold for a premium despite their small proportions.

In the past 12 months, published sales prices for a one-bedroom house in Paddington have ranged from $1.42 million to $2.88 million.

To put this in perspective, at the end of July 2021 the overall Paddington median house price was $2.8 million, with two-bedroom houses selling for a median of $1.82 million. The median unit price was $965,000 and one-bedroom units were selling for a median of $751,000.

The tiny house movement

Some people love things in small packages, and there’s little doubt the growing international tiny house movement has made small beautiful again.

Proponents of this architectural and social movement believe in downsizing living spaces, simplifying and living with less. They argue that it’s eco-friendly, more affordable, and a simpler way to live.

But the definition of a true tiny home for proponents of this movement is also 37 square metres of floor space, which may be a little too cosy for many people. In fact, chances are you won’t find anything even close to that threshold in this area. But you can still take advantage of the benefits and simplicity that come with living small.

Different groups buying smaller homes

That said, not everyone wants a smaller home for the same reasons.

Some are first home buyers, limited by their budget, but keen to invest in a house rather than an apartment.

There’s a whole group of buyers looking for an inner-city crash pad. They’re often drawn to small properties for their low maintenance appeal without the strata fees or communal living found in an apartment.

But one-bedroom houses in this area also appeal for another reason: their potential.

A lot of buyers are attracted to small terraces because, while they may be tiny now, they often have the scope to redevelop a prime inner-city address. Some even come with a DA for a renovation or a complete rebuild. And many have unrealised potential to add more bedrooms, parking, larger living spaces and more.

Houses vs apartments

When you talk about one-bedroom, you inevitably end up weighing up the pros and cons of a house compared to an apartment.

There’s no doubt that for the same dollar amount as a smaller house, you can usually buy a much larger apartment in the same area. Apartments typically require a smaller investment and offer an easier entry point to the property market. And many buyers find the low maintenance, lock-up-and-leave lifestyle an apartment offers very appealing. However, apartments also come with ongoing strata fees.

Houses - even one-bedroom houses - are generally more expensive and may require more upkeep, which is all your responsibility. But, on the flip side, there is also typically more to gain with a house. You also own the land and, assuming permission is granted, you can renovate, add value, make it bigger and typically realise more capital growth over the longer term.

This could be why banks have traditionally been reluctant to lend on smaller apartments, but less so on small houses.

One-bedroom houses in Paddington

We’ve sold several excellent properties in Paddington recently.

10 Spring Street

This one-bedroom, one-bathroom home in Paddington that sold for $1.735 million in June 2021. Freestanding on one side this double brick terrace had a 4.35-metre frontage and north to rear aspect.

19 Sutherland Avenue

At just 114 square metres, this small property attracted huge interest from investors and first home buyers, eventually selling for $1.625 million in February 2021. A weatherboard character-filled home, it offered a little more with a second bedroom and side access.

5 Victoria Street, Paddington

This small but perfectly presented historic stone cottage had a unique layout, offering two bedrooms and a flexible study space. It sold for $1.7 million in August 2020.

And finally…

We’re still running at full capacity, in line with COVID restrictions. So, if you’re thinking about buying or selling in Sydney’s Eastern Suburbs contact my team today.

Download our 2018/2019
Eastern Suburbs Market Report

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