For the first time ever in Melbourne, a tiny house sold under the hammer on Saturday afternoon.

The very small slice of real estate was snapped up by a family for $56,000.

The unique auction had generated huge buzz on social media, reflecting the growing popularity and interest in the tiny house movement.

Hundreds of people, including commercial television networks, gathered to watch three bidders battle it out for the keys.

On the market was Tiny Homes Australia's 'The High Country' model, which stretches six metres in length and features a sofa bed, fully-equipped kitchen, dining space and bathroom. The model typically retails for $59,990.

The Ringwood-based business was set up at the start of the year by father and son duo Paul and Indi Hangan, who also own Hangan Constructions. They now employ 14 carpenters and builders who design and build tiny houses ??? and business is booming.

Throughout the auction campaign, they estimated about 10,000 people inspected their tiny houses. Originally, two homes were scheduled to go to auction but it was later decided one would remain on display.

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Speaking to Domain after selling the tiny home,auctioneer Mitchal Towns from Philip Webb said it had been a "really fun journey".

"From day one, we were just hoping to get a good amount of interest. And the result has been mindblowing."

"It just goes to show social media's power."

The successful bidders, a family from Melbourne's south-eastern suburbs, plan to park the tiny home on their property forprivate use.

Although the auction was mostly a promotional event, Mr Towns said he would be happy to auction more tiny houses in the future.

It is not the way Tiny Homes Australia usually do business. The Hangans pride themselves on providing clients with the opportunity to customise a tiny house at the design, construction and finishing stages.

As the small-scale living movement continues to gain traction across Australia, more builders and manufacturers are jumping on the bandwagon.

???Tiny homes, typically measuring between seven and 37 square metres, usually generate their own power and can be designed to be easily transportable.