As more Australians look for alternatives to traditional housing, two options consistently come up: modular homes and Tiny Houses on Wheels (THOWs). While they can look similar on paper — both often factory-built, both compact, both perceived as “faster” than conventional builds — they operate under very different planning, approval and lifestyle frameworks.
Understanding the difference is essential before committing time, money and land.
What Is a Modular Home?
A modular home is a permanent residential building constructed off-site in sections and assembled on land. Once installed, it is legally classified as a Class 1a dwelling under the National Construction Code, the same as a traditionally built house.
This means:
- It requires planning approval and a building permit
- It must comply fully with the NCC
- It is fixed to permanent footings or a slab
- It is tied to the land indefinitely
From a council perspective, there is no distinction between a modular home and a traditional house once installation is complete.
Do Modular Homes Come on Wheels?
No. Although modular homes are transported to site, they are not designed to be lived in on wheels. Any wheels or transport frames are removed once the modules are placed onto permanent footings or slabs.
From a planning perspective, modular homes are buildings. Once installed, they are locked into the land permanently and cannot be relocated without major demolition and cost.
This is an important distinction — especially compared to Tiny Houses on Wheels.
What Is a Tiny House on Wheels (THOW)?
A Tiny House on Wheels (THOW) is a compact, fully functional home built on a trailer, designed to be mobile, flexible, and efficient. Unlike traditional houses, THOWs combine all the essential living spaces — kitchen, bathroom, bedroom, and living area — into a small, thoughtfully designed footprint that can be relocated with ease.
THOWs are ideal for those seeking:
- Affordable living: Smaller size means lower build costs and reduced ongoing expenses.
- Flexibility and mobility: Built on a trailer, they can be moved to different locations without the need for permanent foundations.
- Minimalist, sustainable living: Efficient use of space, smart storage, and often eco-friendly features like solar panels, rainwater harvesting, and composting toilets.
- Lifestyle freedom: Perfect for weekend getaways, Airbnb rentals, or full-time downsizing, THOWs let you live simply without sacrificing comfort or functionality.
Essentially, a THOW provides all the comforts of home in a compact, mobile, and adaptable package, making it a popular choice for people embracing a simpler, more flexible lifestyle.
Approval Pathways: Permanence vs Flexibility
One of the biggest differences between modular homes and THOWs is how councils assess them.
| Modular Homes | Tiny Houses on Wheels (THOWs) |
| Require development approval and building approval | Follow caravan legislation, so they generally do not require planning or building approval |
| Trigger engineering, construction inspections and compliance certificates | Assessed mainly for impact, safety, and amenity under caravan standards |
| Follow the same regulatory pathway as any permanent dwelling | Do not typically require building permits because they are not fixed buildings. Consult your local council to understand specific rules for living in a caravan at your location. |
This distinction is why THOWs are increasingly used as faster-response housing options in councils dealing with affordability and supply shortfalls.
Land Commitment and Mobility
A modular home requires full land commitment before construction begins, with services, access, setbacks and overlays all addressed upfront. Once installed, the home is permanently fixed: it cannot be relocated, the investment is tied to that specific site, and changing locations typically means selling or rebuilding.
Tiny Houses on Wheels (THOWs), by contrast, are designed to move as life circumstances change. They are not permanently locked to one parcel of land and can be relocated without demolition. THOWs can use composting toilets meaning they don’t require fixed plumbing, which adds to their mobility and flexibility. This adaptability is particularly valuable for regional work, seasonal living, family changes, or for those wanting to trial land use without committing to permanent construction.
Quality, Size and Design: Clearing Up Misconceptions
A common assumption is that modular homes are “real houses” and tiny houses are not.
In reality, modern THOWs are:
- Built using domestic-grade materials
- Fully insulated and weather-sealed
- Fitted with full kitchens and bathrooms
- Designed for long-term occupancy
While THOWs must follow caravan dimension rules to be towed, they are permitted greater height — often up to around 4.3 metres — allowing for loft bedrooms, high ceilings, and innovative spatial design. At Aussie Tiny Houses, every home is built with quality materials and thoughtful craftsmanship, so the interior feels warm, spacious, and functional — just like a conventional house.
From durable flooring to well-appointed kitchens and bathrooms, each design balances compact efficiency with comfort, style, and practicality, ensuring that living in a THOW is never a compromise on quality. This is what allows THOWs to function as real homes, not compromised living spaces.
Cost and Financial Exposure
Modular homes are ideal for buyers seeking long-term equity and stability, but they come with a greater financial commitment. Typically, they require land purchase, infrastructure connections, approval and inspection costs, and higher upfront capital. For many Australians, this difference is not marginal — it’s decisive.
Tiny Houses on Wheels (THOWs), by comparison, do not require land ownership upfront, have significantly lower entry costs, often cost less than rent over time, and reduce exposure to long-term debt, making them a highly flexible and accessible alternative.
Lifestyle Implications: Choosing Control over Convention
When it comes to lifestyle, modular homes excel in situations where permanence is the goal, offering stability and long-term equity.
THOWs, on the other hand, shine where flexibility matters. They allow downsizing without displacement, independent living on family land, faster access to housing than traditional builds, and a lighter financial footprint. Increasingly, THOWs are not viewed as temporary solutions, but as deliberate lifestyle choices that reflect modern values of sustainability, mobility, and financial resilience.
Why Tiny Houses on Wheels Are Gaining Traction with Councils
Councils across Australia are recognising that THOWs:
- Fill housing gaps faster than permanent builds
- Reduce pressure on infrastructure
- Provide dignified housing options for diverse demographics
Rather than forcing THOWs into outdated categories, forward-thinking councils are developing policies that reflect how these homes are used.
So, Which One Makes Sense?
Choose a modular home if you want permanent residency on owned land, long-term capital growth, and the security of traditional planning pathways. A Tiny House on Wheels, by contrast, is ideal if you value flexibility over location, lower upfront costs, faster approvals, and a home designed around lifestyle adaptability.
At Aussie Tiny Houses, we design homes intentionally for this second category — homes that deliver comfort, quality and independence without locking people into burdensome systems.
In a housing landscape that’s changing rapidly, flexibility isn’t a compromise. For many Australians, it’s the solution. Let’s connect and talk more about your plans!
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