From high-density studios to suburban subdivisions, the micro apartment debate is heating up

Would you live in a space smaller than most living rooms?

In Perth, a new $22 million development has been approved to build 88 micro apartments, most just 26 to 28 square metres — roughly the size of two car park spaces. Meanwhile, in Brisbane, a subdivided house in Deagon is now home to five self-contained micro units, each renting for over $400 a week.

Welcome to the rise of micro living in Australia.

With the housing crisis showing no signs of easing, governments, developers, and investors are all looking for creative ways to add more homes — fast. But the question remains: is micro housing the solution we need, or a band-aid with limited impact?

The Perth play: building up and shrinking down

The Perth development on Stirling Street, just north of the CBD, is a build-to-rent model targeting FIFO workers, students, and young professionals. It includes self-contained units, communal kitchens, co-working spaces, a gym and rooftop terrace — offering flexibility with shorter leases and shared amenities.

Support from WA Planning and the City of Vincent indicates a broader willingness to experiment with new housing models, even if the apartments fall below traditional minimum size guidelines.

Still, Professor Shaun Bond from the University of Queensland remains cautious.

“These types of apartments have existed in the US and Europe for years,” Bond said. “But the reality of living in them is mixed. They need to be well designed, or they can feel isolating and cramped.”

And with many lenders still wary of units under 35 square metres, financing and resale risk remains a real concern.

Brisbane’s ‘resi-rental’: a different kind of density

Over in Deagon, Brisbane, Future Housing Taskforce chair Kevin Doodney is taking a different approach. His model — dubbed ‘resi-rental’ — subdivides existing homes into five studio-style micro apartments, each with its own bathroom and kitchenette.

Doodney is blunt about his intent: helping investors profit during the housing crisis.

“The ethics of it do not come into play,” he told ABC Radio. “The tenants are winning, the owners are winning.”

He argues that these micro units provide a better alternative to slum rentals and caravan parks, and he is not wrong about the price point — powered tent sites in Deagon reportedly cost more per week than one of his micro apartments.

Thanks to Queensland housing law reforms, these micro rooming houses are now legal without council approval, provided they house five or fewer people. They are also exempt from infrastructure charges.

But is it actually affordable?

At $400 or more per week, micro apartments are often pitched as affordable, but many in the sector disagree.

Tenants Queensland CEO Penny Carr says calling them affordable is misleading.

“For someone on JobSeeker, this is not even close to affordable,” she said. “You would be paying 50 percent or more of your income just on rent.”

And that is where the tension lies.

Micro apartments might increase supply, but they do not necessarily solve affordability. They may suit mobile professionals, students or retirees like Robyn and Rodger Macqueen — the new owners of Brisbane’s first resi-rental — but they do little for families or low-income earners struggling to get into the market.

Where does this leave builders?

Builders are watching this trend closely. On one hand, micro units are fast to build, efficient on land, and offer new business models in the build-to-rent space. On the other, they introduce new design and compliance complexities, with tight floor plans demanding smart construction and clever use of space.

And there is reputational risk. As more of these developments emerge, public scrutiny will grow.

So, what is the opportunity?

For some builders, micro apartments could be a viable niche — particularly in dense inner-city areas or investor-driven markets. But the real win might come from taking the lessons of micro design — efficiency, amenity, modular thinking — and applying them across a broader mix of medium-density solutions.

As Professor Bond put it, “We want a variety of options. Micro apartments are one piece of the puzzle. But we also need more townhouses, larger apartments, and well-designed infill.”

The Good Builder take

The micro apartment trend is not going away. In fact, it is likely to grow as pressure mounts on housing supply, planning rules soften, and younger demographics demand flexibility over floor space.

But they are not a one-size-fits-all answer.

If you are a builder exploring smaller formats, the opportunity is real — but so is the responsibility to deliver quality, dignity and long-term liveability.

Because in this market, no one wants to be known as the builder of shoe boxes.

Want to share your take on compact living or showcase a micro project done right?

Get in touch at thegoodbuilder.com.au — we are always looking to highlight smarter design and practical innovation in residential construction.

Author: TGB Editorial