A three-room home known as Toronto's smallest house is for sale at $180,000. (MLS)

A little piece — actually the littlest piece — of the Toronto housing market is for sale.

The home has just three rooms and measures slightly over 300 square feet.

The real estate ad calls it "charming" and "unique."

With the average house price in Toronto around $400,000, the "tiny house" as it has become known, looks like a bargain.

The home, located in Toronto's Little Italy neighbourhood, is selling for just under $180,000 — $7,000 more than it sold for just a year ago.

In 2007, the nearly century-old home sold for $139,000.

The home has a bedroom with a built-in Murphy bed, a kitchen with folding table and chairs, and a living room. A basement storage area is accessible through a trap door. It also has a full bathroom.

Neighbours say the house was originally built on a strip of land that was intended to be a laneway back in 1912.

Although the house comes with just three rooms, it includes two parking spots.