Australia’s Housing Challenge and How Granny Flats Can Make a Difference

The research paints a promising picture of the potential of granny flats to alleviate housing shortages in Melbourne, Sydney, and Brisbane.

Granny flats, or accessory dwelling units (ADUs), offer a unique solution to the ongoing housing shortages in Melbourne, Sydney, and Brisbane. These self-contained living spaces, often located on the same property as single-family homes, are versatile and can play a pivotal role in addressing the housing crisis in major Australian cities. A recent report by Archistar, Blackfort, and CoreLogic has shed light on the significant potential these secondary dwellings hold.

Granny flats sometimes referred to as mother-in-law suites, are not only designed to accommodate elderly family members but have evolved into a practical means of generating rental income, providing a home office, or adding extra space for various purposes. Equipped with essential amenities like a kitchen, bathroom, bedroom, and living area, these units can be attached to the main house or built as separate structures. However, it’s crucial to note that regulations and zoning laws concerning granny flats can vary by location, making it necessary to check local ordinances before embarking on such construction projects.

The research, published recently, identifies 655,000 existing homes in Melbourne, Sydney, and Brisbane that have the space to accommodate a self-contained two-bedroom granny flat on the same site. In Sydney, the report reveals that 17.6% of all properties within the metro area, including the Central Coast, have the potential to host a granny flat. Meanwhile, Melbourne boasts 13.2% of suitable properties. Impressively, more than a third of these potential developments are located within a mere 2 km of a train station, and 17% share a suburb with a hospital.

The strategic placement of these secondary dwellings suggests that they could offer affordable housing for essential healthcare workers. This proposal is particularly significant given the national housing market’s anticipated undersupply of about 106,300 homes over the next five years. By facilitating the provision of affordable housing for essential workers, granny flats can contribute to mitigating the ongoing housing crisis.

According to Tim Lawless, Research Director at CoreLogic, granny flats present a cost-effective and immediate opportunity for policymakers and governments to enhance housing supply within existing town planning guidelines. By tapping into this underutilized resource, it becomes possible to take a substantial step toward addressing housing shortages, especially in urban areas.

When delving into the specific metropolitan regions, the study identifies areas with the most potential for granny flat development. In Sydney, the Central Coast, along with the northern beaches and Hornsby, are noted as prime locations. In Melbourne, the Mornington Peninsula, Casey, and Monash stand out, while in Brisbane, the Brisbane local government area, Logan, and Moreton Bay present the most potential. The study reveals approximately 242,000 suitable properties in Sydney, 230,000 in Melbourne, and another 185,000 in Brisbane.

While these findings emphasize the advantages of granny flats as an effective solution to housing shortages, some experts have raised questions regarding their ultimate effectiveness in addressing the issue. According to Prof. Nicole Gurran, an urban planner at the University of Sydney, enabling people to build granny flats is essential, as it can enhance housing stock, flexibility, and diversity. However, it’s important to recognize that granny flats should be considered a part of the solution, and an overall higher-density, well-planned approach may be more suitable for increasing housing supply in cities like Sydney, Brisbane, and Melbourne.

In the realm of planning and construction, changes to Victoria’s planning process have indeed made it easier to obtain permission to build granny flats. However, experts like Andrew Butt, a professor in sustainability and urban planning at RMIT University in Melbourne, remain skeptical about their effectiveness in combating the housing shortage. He questions whether secondary dwellings can genuinely fulfil the need for secure housing.

In South Australia, the government has taken steps to recognize the value of granny flats in boosting the rental supply. Recently, legislation was passed to prevent local councils from prohibiting homeowners from renting granny flats to anyone other than immediate family members. This highlights the growing recognition of the role these secondary dwellings can play in addressing housing shortages.

Ultimately, the research paints a promising picture of the potential of granny flats to alleviate housing shortages in Melbourne, Sydney, and Brisbane. These secondary dwellings, when utilized effectively, can offer a practical and cost-efficient solution to the ongoing housing crisis in major Australian cities.