The short answer
In Australia in 2026, a small house costs roughly:
- Tiny home on wheels: $65,200 to $204,000
- Granny flat built on site: $120,000 to $250,000
- Modular or prefab home: $150,000 to $350,000
“Small house” means different things to different people, and these are genuinely different products with different rules, timelines and costs. Here they are side by side.
The three options compared
| Tiny home on wheels | Granny flat | Modular home | |
|---|---|---|---|
| Cost | $65,200 - $204,000 | $120,000 - $250,000 | $150,000 - $350,000 |
| Size | 6 - 10m long, 2.5 - 3m wide | 40 - 60 sqm typical | 50 - 120 sqm |
| Build time | ~5 weeks | 3 - 6 months | 4 - 8 months |
| Foundations | None - registered trailer | Permanent slab | Permanent slab |
| Approval | Usually caravan rules | Full council approval | Full council approval |
| Movable | Yes | No | No |
| Adds property value | No - it is a chattel | Yes | Yes |
Tiny home on wheels: $65,200 - $204,000
Built on a registered, engineered trailer, so it is legally closer to a caravan than a building. That is the source of most of its advantages and all of its limitations.
Why people choose it
Cheapest genuine home of the three, up in about five weeks rather than months, usually avoids full council approval, and you can take it with you. For anyone on leased land, family land, or expecting to move, it is often the only sensible option. See the tiny homes we have for sale.
The trade-offs
It does not add value to the property it sits on, because it is not part of the property. Finance needs a specialist lender. And most models are 2.5m wide, which shapes what is possible internally.
Best for
First-home buyers priced out of the market, people adding a dwelling to family land, downsizers, and anyone who values being able to move.
Granny flat: $120,000 - $250,000
A permanent secondary dwelling on an existing residential block, on its own slab, fully approved. Full granny flat cost breakdown.
Why people choose it
It adds real value to the property and can generate rental income. It is a genuine second home on the title, with mortgage finance usually available.
The trade-offs
Costs more, takes 3 to 6 months, needs full council approval, and it is permanent. Whether you can build one at all depends on your block size, zoning and council, and the rules vary a lot between states.
Best for
Homeowners with land who want to house family, generate income, or add long-term value. Compare granny flat options in Australia.
Modular or prefab home: $150,000 - $350,000
Built in sections in a factory and assembled on a permanent foundation. Effectively a conventional house built in a different order.
Why people choose it
Full house size and specification with better cost control and weatherproof factory construction. Mortgage finance is generally straightforward.
The trade-offs
Most expensive of the three, needs full approval and proper site works, and requires crane access.
Which is cheapest?
A tiny home on wheels, clearly. But cheapest is the wrong question if the options are not interchangeable for you. Choose the tiny home if you need mobility, speed or the lowest entry price. Choose the granny flat if you own the land and want permanent value. Choose modular if you are building a primary home.
Common questions
How much is a small house in Australia?
Between $65,200 for a lock-up tiny home and $350,000 for a large modular home. Most small dwellings land between $120,000 and $250,000.
What is the cheapest type of small house?
A tiny home on wheels. LJM’s Tea Tree starts at $65,200 lock-up and $110,700 turn-key, with no slab, usually no full council approval, and about five weeks to build.
Is a tiny home cheaper than a granny flat?
Usually yes. The granny flat adds property value though, so over a long horizon the economics can flip if you own the land.
Can I live in a tiny house permanently in Australia?
In many areas yes, but the rules vary by state and council. Because these homes sit on registered trailers they are generally treated as caravans, and most councils have rules about how long a caravan can be occupied on a property. Check locally, early.
Do small houses add value to a property?
Granny flats and modular homes do, because they are permanent and on the title. Tiny homes on wheels do not - they are personal property, which also means you keep the value if you move.
Not sure which one you need?
Most people arrive with a budget and a rough idea, and the conversation clarifies things quickly. We build tiny homes, so we will tell you if a granny flat is the better fit for your situation. It sometimes is.
