The phenomenon of tiny homes is growing in popularity in New Zealand with over 100,000 people attending The Tiny Homes expo in Auckland last year. Whether it is an entry point to the housing market or to be used as a Bach or Air BNB, people are seeing tiny homes as a viable, affordable option to meet their housing needs.
A recent survey highlighted that the largest buyers of tiny houses are people over 55 who are looking to free up equity, empty nesters who no longer need so much space, and those who want to own their own home but be debt free in retirement.
Whatever the reason you’re after a tiny home, there are two areas that you need to be aware of – Funding options, and Resource Consent.
All but one of the main banks have avoided putting out a policy on funding for tiny homes. This is because most tiny homes are prebuilt and this creates complexities regarding insurance for while the home is being built, and also while it is in transit. Westpac do have a Tiny Home policy which allows you to borrow up to 90% of the value of your new home. Most banks will allow a tiny home on an existing property and there are options to release equity in either the vacant land, or the land and dwelling.
A new house of any size will usually require a resource consent, depending on the relevant district plan. As of 2020, New Zealand does not have clear, straightforward rules around tiny homes and whether they require a building consent, resource consent or nothing at all.
Decades old zoning and building codes in some areas won’t allow for tiny homes of any kind. Others allow them but place severe restrictions on where and how you can build them.
We think tiny homes are a fantastic option for not only their lower price point, but also the lifestyle advantages including lower running costs, little or no mortgage if you are downsizing, lower energy use, and easier maintenance. On the flip side, you would need to be comfortable with less living space, limited storage space, no entertaining area (especially when wet) and dealing with a raft of uncertain rules and regulations from the local council. We don’t think they’re the solution to our housing shortage but they definitely have their place!