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Australia

Compact homes unlocking cheaper, cleaner city living

26 February 2026 06:00 | News

In a time of climate change and tight housing prices, sometimes it pays to think small.

At just 50 square metres, the apartments and townhouses at the Two Sisters development in North Melbourne are much smaller than the average Australian home of 236 square metres, the largest in the world.

It’s a decision that allows building developers, sisters Eve and Michelle Pickering, owners and occupants of the two houses, to minimize costs and environmental footprint.

Jeremy McLeod of Breathe, director of the architectural practice behind the design, says smaller homes contain less carbon in the materials used, provide less energy and emissions to run them, and are more affordable.

“This is a nice, simple way to solve the carbon and cost crisis at the same time,” he told AAP.

Breathe founder Jeremy McLeod says the development of Two Sisters has been inspiring. (James Ross/AAP PHOTOS)

Although small, every square inch has been maximized, with most residences spanning two floors and complete with their own private courtyards.

Tenants of the build-to-rent building will also be left without parking; This is a deliberate call to keep emissions and costs even lower.

Passively designed, high-performance residences rarely require mechanical heating and cooling, and common areas are powered by rooftop solar power.

Climate-friendly homes are also increasingly responsible for the carbon released in the construction of buildings, concrete and steel.

Low-carbon cement substitutes and carbon-neutral bricks were used, and unnecessary material was minimized by leaving ceilings exposed and floors polished rather than covered.

“It’s about revealing the integrity of the building rather than covering it with materials,” Mr McLeod said.

He applauded Michelle and Eve for their generosity.

“These two sisters started out by saying, ‘I’m building my own house, but what can I give to the city?’ “They approached it from that perspective,” he said.

Eve and Michelle Pickering
Eve and Michelle Pickering aimed to minimize costs and environmental footprint with the homes. (Michael Currie/AAP PHOTOS)

The project emerged when the couple started looking for a place in the city to build a house for themselves.

Urban, walkable North Melbourne has quickly become a top contender.

“It’s a very diverse neighborhood in terms of its physicality, with residential, commercial and retail all mixed together,” Eve told AAP.

“And we have amazing transportation here.”

Eve’s background in urban development and architecture led her to realize that it made sense to squeeze more than two residences into their unusual space.

The Two Sisters project will be one of 240 homes open to the public on May 17 for Sustainable Home Day, an event hosted by Renew to recognize that homes account for more than 10 percent of total emissions.


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