If you're under 25 and Australian, chances are you live at home. There's also a good chance you would prefer to move out, but can't afford to pay rent.

Nearly one in four Australians aged 20-34 continue to live in in their parent's house. In our two biggest cities, Sydney and Melbourne, this figure is even higher.

Meanwhile, the average age of first-home buyers has gone up from 25 in the 1970s to 31 today.

That's because the real cost of buying a house has gone up. One in five first-home buyers use 50 per cent of their income to service their mortgage.

Half. Their. Income.

Here are four inspired and perhaps slightly illegal ways Australians are swapping the 'Australian dream' - a quarter acre suburban block - for a smaller mortgage and more holidays and free time.

1. Move into the garage

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Whatsapp After: The converted garage.

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Whatsapp Before: The garage before the rennovations.

Working nights and weekends, Lucia and Aidan took three months to convert their apartment's garage into a living space, using mostly salvaged and recycled material.

Lucia, a graduate architect, says utilising more space in the inner-city would reduce car use, increase cycling and public transport and address suburban sprawl.

The cost: $7000 for materials + you need a spare garage

"Within five months it paid for itself in the savings we made by not paying rent elsewhere. We only ever wanted to stick it out for five months and then see how we felt about living there. We lived really comfortably in there for one year."

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Whatsapp Garage bedroom and bathroom space.

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Whatsapp Kitchen and living space with open roller door.

Unfortunately, they had to abide by corporate rules and call the space an art studio rather than a full-time residence. This meant they had to keep the garage tilt door.

The catch: It's illegal

"Climatically, it felt like a little fridge in the Brisbane summer because is was a sunken ground floor garage space in a concrete shell. "

"The neighbours thought it was a really creative use of space, although at times looked confused with how and why we were doing it. I think it pushed their idea of 'home' beyond their imaginations. I haven't received any complaints."

2. Go to sea

He cooks on a butane gas burner, lights the cabin with solar panels, and showers at work - Geoff, 30, lives on a boat in Sydney harbour and commutes to work in the city.

The cost: $80-a-week mooring fees + $40,000 for the boat

The $40,000 cost of the boat was small enough he could get a mortgage without a deposit.

"I decided to move in because it was convenient at first," he told Hack. "It seemed exciting and different. I intended to look for a house but just didn't leave. What it's meant is I can pay off the boat at the same time as living on it - without paying rent."

The catch: It's illegal

"I think it's against the law. I don't do things like hang my washing out on the boat or make it obvious that I'm living on the boat."

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Whatsapp The cabin of Geoff's boat in Sydney harbour.

3. Downsize

Rebecca was 22 and living with her parents when she began building the Tiny Abode - a 7.2 square metre timber-steel-and-tin house on the back of a trailer.

The cost: $18,750 for materials

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Whatsapp The steel frame of the Tiny Abode trailer house under construction.

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Whatsapp Rebecca Benson and Reece Brennan with the completed trailer house.

The US has a thriving Tiny Homes movement where people are selling their houses, giving away most of their possessions and downsizing into tiny movable homes. Because they're built on a trailer they bypass zoning and council laws.

"I wanted a project that would build and grow my skills. It's relatively small but comfortable. It has a full shower, a full kitchen."

"It's about your mentality. We've become accustomed to the affluence of Australian society. The house has everything. It's not like you have to give up clothes."

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Whatsapp The bedroom loft of the Tiny Abode trailer house.

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Whatsapp The kitchen of the Tiny Abode trailer house.

The catch: Parking your castle

The abode is now built and Rebecca is looking for a place to park up. She says others who have built tiny houses have been in touch about sharing a block of land to park their houses and set up a communal cooking and living area.

For the moment, though, she's still living at home.

4. With the old folks

Your typical housemate in your twenties is probably a guy who leaves decomposing dishes in the sink, plays in a shitty band and smokes too many bongs.

But for Emma, a 22 year-old international student, her first Australian housemate is Sybill, an 82 year-old lady in the early stages of dementia.

In exchange for free rent in Sybill's eastern Melbourne home, Emma helps Sybill with chores and is on-hand in case she gets in trouble, which can happen during the night when Sybill gets disorientated.

Yep, free rent.

The cost: Helps with chores, buys groceries

She's also a companion in what could otherwise be a lonely time for Sybill.

"Especially with elderly people, I think they can feel lonely most of the time but they want others to know that they can do everything, they can handle it, but actually they need help," she said.

They've been matched up through Wesley Mission's homeshare program, aimed at keeping older people out of nursing homes for as long as possible with the support of younger volunteers.

The catch: The generation gap

Emma concedes that living with an older person isn't everyone's cup of tea, but she thinks her willingness also comes down to the cultural tradition of living with your elderly relatives in her home country, China.

"When [Chinese] children grow up, they need to care for their parents and grandparents but here it's different, everyone is so independent."

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Whatsapp Sybill, 82, and Emma, 22, outside Sybill's Melbourne home.

Do you have any creative solutions to the high cost of rent and housing?

Share them with us below.