Tiny homes in Canberra: Harder to get a home loan?

What to consider before buying a tiny home in Canberra

With property prices reaching record highs in April 2025, according to PropTrack, more Australians are turning to affordable alternatives – and tiny homes are gaining traction. If you're considering buying or building one in Canberra, it’s important to understand key factors like council regulations and financing options.

What is a tiny home?

A tiny home is a small, self-contained dwelling, usually between 15 and 50 square metres. Some are built on permanent foundations like traditional houses, while others are mobile and built on trailers. They’re designed to maximise space and minimise cost, maintenance and environmental impact.

Are the building regulations different to a house for where you can build them?

Building regulations for tiny homes in Canberra can be tricky to understand. The rules that govern tiny homes depend on whether the home is on wheels or has a fixed foundation.

In the ACT, tiny homes that are fixed to land are generally treated like secondary dwellings or granny flats. This means you’ll need development approval and meet building codes and zoning rules managed by the ACT’s Environment, Planning and Sustainable Development Directorate. The rules can vary depending on the block and suburb.

Tiny homes on wheels are currently not required to be built to the Building Code of Australia (BCA) as they are not classified as “permanent”. However, they could potentially be classified as caravans or relocatable dwellings, which may have different rules regarding where they can be parked or lived in long-term.

How much do they cost?

The cost of a tiny home can vary significantly depending on several factors, including the size, design, materials used and whether you build it yourself, hire a builder or purchase a pre-fabricated model.

According to Aussie Tiny Houses, the cost of a new tiny home can range from $25,000 for a DIY job to $165,000 for a custom-built tiny home. DIY options can be cheaper, but you will need to factor in the time it will take to build.

When calculating the cost of a tiny home, you’ll also need to remember to include land costs if you want a fixed dwelling, or parking fees if you’re renting space on someone else’s property.

Other costs to consider include insulation, utilities, council fees, insurance and transport (for movable homes).

Is getting a tiny home loan any different to a normal home loan?

Securing finance for a tiny home can sometimes be different from obtaining a traditional home loan.

Lenders might prefer to finance fixed dwellings on land, as these can be used as security for the loan. If the tiny home is on wheels and classified as a caravan, you might need to explore personal loans or caravan financing options, depending on the lender and how the home is classified..

For tiny homes built on foundations and considered permanent dwellings, you might be eligible for a standard construction home loan.

Some lenders (like the Commonwealth Bank) have introduced loan solutions specific for modular, pre-fabricated or tiny homes, so it’s a good idea to shop around or speak with a broker who understands the market.

That’s where Loan Market comes in. Our brokers compare loans from over 60 lenders, helping you find finance options that suit your unique goals and circumstances.

Are there any tiny home communities in Canberra?

Canberra doesn’t yet have any large, dedicated tiny home villages, but there is a growing local interest.

Groups like the Australian Tiny House Association have members in Canberra and can be a good place to ask questions, meet like-minded people and stay updated on advocacy efforts.

Social media is also a helpful tool – Facebook groups such as Tiny Houses Australia offer advice, land sharing opportunities and builder recommendations.