HomePropertyGranny flat solution to housing crisis?

Granny flat solution to housing crisis?

Hot off the back of last week’s national housing crisis summit, new analysis across Australia’s three biggest cities has found more than 650,000 residential properties with the potential to build a granny flat.

Advocates say it could help ease pressure from historic low vacancy rates of less than 1 per cent, which have left people scrambling for affordable rentals. 

The analysis, by town planning research analysts Archistar, lender Blackfort and property data group CoreLogic, concluded there was an “untapped potential to boost housing supply”.

The report can be used interactively by homeowners to identify if their property had the correct conditions for a granny flat by assessing land size, zoning, existing structures and compliance requirements.

CoreLogic research director Tim Lawless said he was “surprised” by just how many properties already had the right zoning and town planning codes, and were close to public transport.

“The results highlight significant untapped development potential which could go some way toward fast tracking a partial remedy to the housing shortage in the country’s largest cities,” Mr Lawless said.

“Forecasts indicate the national housing market is likely to be undersupplied to the tune of 106,300 dwellings over the next five years.”

module home in a warehouse
Modular homes have been touted as a solution to the country’s housing crisis. (Supplied)

The federal government has a target to build 1.2 million homes in that time. 

“So this is a quick fix option, I would not say a silver bullet by any means, but it goes a long way towards addressing the under-supply with some immediacy,” Mr Lawless said.

“For policy makers and government, granny flats present an immediate and cost-effective opportunity to deliver much needed housing supply.”

“For homeowners, the addition of a second self-contained dwelling provides an opportunity to provide rental housing or additional accommodation for family members, while at the same time, increasing the value of their property and potentially attaining additional rental income.”

Mr Lawless said nationally there could be more than a million homes ideal for granny flats or second affordable accommodation.

“Once you get into other areas, like Adelaide and Perth, quite often you find block sizes are larger as well,” he said.

‘I want a permanent home’

Maureen Nash lives pays $350 a week for a converted garage she calls a “barn studio flat” on an acreage block in outer Brisbane. 

A lifelong renter, the 64-year-old has moved five times in the past decade. 

The former community worker said she would love to move or even buy a granny flat, with a separate bedroom and living area. 

an older woman sitting on the balcony of her "barn studio"
Maureen Nash has moved five times in the past 10 years. (ABC News: Eddy Gill)

She said she is grateful to have found somewhere to live for now, but fears she’ll be on the hunt again soon. 

“I get nervous and was thinking maybe I need van to live in, or house sit, but at the end of the day I like to come home,” Ms Nash said.

“I want a permanent dwelling, a roof over my head.”

a bedroom within a small studio
The former community worker would love a space with a separate bedroom and living area. (ABC News: Eddy Gill)

Ms Nash welcomed the report but said government inaction on all sides had brought on a crisis. 

“This did not just happen overnight, it was poor planning, no insight,” she said. 

“We are also really behind in this country in terms of how we see housing.

“You can get tiny houses, pod, granny flats up in no time.

“Let’s just get it happening and ensure it is affordable for all.”

Where the potential lies

Sydney was home to the most granny flat development opportunities with around 242,000 suitable properties. 

Melbourne has almost 230,000 potential sites, representing 13.2 per cent of stock, while Brisbane has almost 185,000 suitable sites, representing 23.3 per cent of houses across the metro region.

Of these sites, more than a third are within two kilometres of a train or light rail station and 17 per cent have a hospital within the suburb boundary, which could also provide easy-to-rent dwellings for essential workers in the health care sector.

a graphic map of sydney and surrounds
CoreLogic says there are 242,000 suitable properties in the Sydney region. (ABC News)

Across Sydney’s council regions, the Central Coast has the most granny flat development opportunities with 17.2 per cent of all potential sites. The Northern Beaches, Hornsby, Blacktown and Ku-ring-gai round out the top five regions.

“Sydney’s household formation is forecast to outpace supply from 2025, with the most significant undersupply expected through 2025 and persist up until 2026 at –15,900 dwellings,” Mr Lawless said.

GFX Granny flats CoreLogic Melbourne
Melbourne has almost 230,000 potential sites, according to CoreLogic.(ABC News)

Within Melbourne’s broad regions, the Mornington Peninsula offers the highest potential for granny flat development, with 23,870 sites. 

Casey, Monash, Knox and Manningham round out the top five municipalities for the most granny flat development sites.

“Melbourne was expected to face a major housing shortage from 2023 to 2027, with a deficit of 23,800 dwellings, which is nearly twice the anticipated shortfall of 12,100 new dwellings in Sydney during the same period,” Mr Lawless said.

GFX Granny flats CoreLogic Brisbane
Brisbane has almost 185,000 suitable sites, representing 23.3 per cent of houses across the metro region. (ABC News)

Across the council areas of Greater Brisbane, the Brisbane local government area has the most granny flat development sites, with 184,660 or 40.5 per cent of all opportunities.

The top five Brisbane suburbs with the highest potential for granny flat development sprawl out across Brisbane’s middle and outer ring suburbs, and include The Gap, Alexandra Hills and Redbank Plains.

Build off site and crane them in

Australian Housing and Urban Research Institute managing director Michael Fotheringham said the research showed there was enough land available to help ease the housing crisis quickly.

“Here is a great way to do it and it fits within most planning guidelines,” Dr Fotheringham said.

“One of the challenges in our housing system is we tend to have whole suburbs with three to four bedrooms and while they are great for larger families around 25 per cent of households are single-person.

“And with modern methods of construction we can build these things off site and literally crane them in for fairly rapid deployment.

“Granny flats have been used for family reasons with ageing parents and the like, but there is a role here to play, you can add value to your property, get a rental yield on that.

“Housing demands is infinite, the more we build the more people can make use of it, we are never going to run out of demand.

“In the affordable housing market we need more than half a million dwellings.”

Granny flats add value

CoreLogic figures showed an extra two bedrooms and an additional bathroom could add around 32 per cent to the value of an existing dwelling.

For a house worth $500,000, the addition of a granny flat has the potential to add approximately $160,000 to the value of the property.

Building costs would start at about $100,000.

The Queensland government has made it easier to rent out an existing granny flat.

In May this year, Brisbane City Council announced a streamlined process for “secondary dwellings” allowing for a build up to a maximum of 80 square metres in size.

And just last month the ACT government gave the go ahead for land owners to slit their blocks into dual-occupancy housing, allowing for granny flat style homes or even bigger dwellings of up to 120 square metres.

This is an increase on existing rules, which limited a second dwelling to 90 square metres and did not allow for subdivision.

The report found the granny flat model also supported retirees, many in need of additional income, or vulnerable homeowners, who could use it for round-the-clock care workers. 

Would you be happy to put a granny flat in your backyard? Is it an answer to the housing crisis? Have your say in the comments section below.

2020 Australian Broadcasting Corporation. All rights reserved.
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  1. They could be a useful start to solving some housing issues, but a problem may be insurance, apparently most home insurance won’t cover the homeowner for damage caused by the resident of the Granny flat, but I’m sure there could be a work around.

  2. As Shakespeare might’ve sai: Much ado about bullshit. The ‘housing crisis’ is a nonsense founded in political incompetence. (And for some reason the moronic electorate elects the same politicians time after time. Australia’s land area is about EIGHT MILLION sq.km, so a quarter-acre should cost about 2 cents. (or nothing if previous ‘settlers-rights’ were implemented. I’ve personally built EIGHT houses over the years, including all ‘mod-cons’, (mostly out of recycled material) the most expensive of which cost about $8500 (sic) (and recently resold for $1.8MILLION salvaged from demolition sites). It doesn’t take much money OR experience OR ‘qualification’ to construct a basic house; and once again the ‘Settlement Rights’ ALL THE WAY BACK TO WHEN CAPTAIN COOK ARRIVED). More recently the nefarious ambitions of assorted politicians/bureaucrats have resulted in the virtual outlawing of Owner-Builders. And yet STILL the homeless people living under bushes, along with the rest of the morons looking on, KEEP ON VOTING FOR AND SUPPORTING THE SYSTEM THAT’S SOLELY RESPONSIBLE FOR THE PROBLEMS. The LESSON: Do SOMETHING CONSTRUCTIVE ABOUT THE PROBLEM OR STOP BITCHING ABOUT IT!! PS. I note that more and more ‘elected bodies: mostly ‘Local Councils) are now even outlawing people living under bushes and/or in cars. This country needs an armed revolution (or at least a ‘JUST SAY NO’ movement). The victims of the current system (including ripped-off TAXPAYERS !) HAVE NOTHING TO LOSE!

  3. addendum: For the last 65,000 years (when the Blackfellas turned up) until about 30 years ago there was NO HOMELESSNESS in this ‘Lucky Country’, Australia. We have endless space and resources. Any ‘authority’ who allows the current situation needs to be shown the error of his ways (with a baseball-bat) and thrown out of office. Isn’t that the point of ‘democracy’??

  4. Why the limitations on size? my case, I live with my wife and sister in-law, so I do need three bedrooms, my wife she is a sick person with cancer and need her own space, so each of us need a bedroom, but 80sqm is not enough, I designed a duplex which will use 60sqm at the ground (living area) and 70+ sqm (bedrooms and bathrooms)at the first floor, all together will be 130 to 150 sqm so, I am over for 50sqm. But the smart idiots think only on a couple who sleep together even if they don´t like to stay together or need their own space. That restriction must be abolished, is descrimination.

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