With housing affordability being a major problem in Australia, recent research shows that tiny houses appeal to a wide demographic, particularly to single-person or couple households.

The tiny house movement became popular in the United States in the late 1990s as a response to housing affordability problems, the global financial crisis, and the desire to live more sustainably. Now, its influence is also being felt in the rest of the world, particularly in Australia, where economic and social factors, like affordability and sustainability, are driving interest.

But in spite of growing interest in tiny houses, few have actually built a tiny house. This is due to several economic barriers, such as insufficient cash, lack of mortgage finance, inability to insure mobile tiny houses, and the lack of potential capital gains. There are also regulatory issues like onerous planning schemes and building codes, transport restrictions, and the unavailability of purpose-built tiny houses. Social barriers also exist, such as the unwillingness to relocate and a dislike of renting. All these barriers are mostly relevant for detached properties in urban areas.

Though tiny houses may only appeal to a small but passionate niche of the total housing market, the demand for these affordable, well-designed, smaller, and more sustainable houses in a community should not be taken for granted. It can become a viable solution to housing affordability and urban sustainability if policymakers and the housing industry could meet this demand with land-use planning reform together with innovative housing forms and structured financing methods.