Tiny Build sales manager Jen Westbrook said the company joined the movement and formed as a branch of truss and frames business Buildpaq, which started in Orange two years ago.

"I think with the growing demand with accommodation in Orange and this area it's giving a different option," Miss Westbrook said.

She said the tiny houses ranged from $55,000 to $85,000 according to what people wanted, and people bought the tiny houses to be used as a granny flat, to live in full-time, to live in as a holiday home, for guest accommodation, to rent out through a real estate or to run as an Airbnb.

"There's a lot of demand for it and it's getting more and more popular," Miss Westbrook said.

"Across NSW we've heard a lot from people on properties.

"In terms of sustainable living there's lower carbon emissions because you are living in a smaller dwelling, on top of that you can put solar panels on the roof, you can use compostable toilets and put rainwater tanks with it.

One of the larger tiny houses the company supplies was displayed at the Rotary Family Market Day, which was part of the Banjo Paterson Australian Poetry Festival on Sunday.

Miss Westbrook said there were a few people at the markets who had lost their home in the summer bushfires and they were looking at tiny houses as an accommodation option while they went through the process of rebuilding.

She said other people who are interested in the homes came from northern NSW.

Although both tiny houses and caravans are transportable and are on wheels, Miss Westbrook said a tiny house was a home rather than something to take travelling.

Miss Westbrook said every local government area had different stipulations when it came to tiny houses so anyone who was interested in them should contact their local council first.

Orange City Council Corporate and Community Relations manager Nick Redmond said due to the growing interest in tiny houses it was a topic on Orange City Council's agenda and would be one of many issues considered as part of its new housing strategy.

"We're certainly looking forward to hearing the views of the community about tiny houses when the draft housing strategy is up for discussion next month," Mr Redmond said.

"Like any other form of housing, a proposal to install a new tiny house would have to be considered to see if it's in keeping with the local neighbourhood.

"In some respects, because it's a new concept, the level of community interest in tiny houses is ahead of the state government framework of regulations."

Mr Redmond said in some cases a tiny house could be assessed as being a complying development and may be able to be installed without a DA, if it was characterised as a secondary dwelling alongside another approved house.

However, he said there would be issues of minimum lot sizes and maximum site coverage to consider.

"A proposal for a tiny house may also be able to be considered under the regulations which cover mobile homes and caravans, but there are also some potential obstacles for approvals in this pathway," Mr Redmond said.