Exploring the Untapped Potential of Granny Flats in Major Capitals to Enhance Housing Supply

⚡️ Highlights:

1. More than 655,000 residential properties across Sydney, Melbourne, and Brisbane have the potential for granny flat development, offering a solution to the housing shortage in Australia’s largest cities.

2. Sydney has the most opportunities for granny flat development, with around 242,000 suitable properties, followed by Melbourne with almost 230,000 potential sites, and Brisbane with almost 185,000 suitable sites.

3. Over a third of these sites are within two kilometers of a train or light rail station, making them accessible for essential workers in the healthcare sector.

4. Granny flats provide an immediate and cost-effective opportunity to address housing shortages and increase rental housing supply within existing town planning guidelines.

5. Adding a granny flat to a property can increase its value by approximately 32%, with the potential to add around $160,000 to the value of a $500,000 house.


In recent years, the housing market has faced numerous challenges, including rising demand and limited supply. One solution that has been overlooked is the potential of granny flats in our largest capital cities. A recent study by CoreLogic delves into this untapped potential and how it could significantly boost the housing supply.

The Current State of Granny Flats

Granny flats, also known as secondary dwellings, have long been a part of the Australian housing landscape. They offer a unique solution for multi-generational living, providing a separate space for elderly parents or adult children. Additionally, they can serve as a source of rental income for homeowners.

However, despite their benefits, the development of granny flats has been limited in major capitals. Several factors contribute to this, including regulatory hurdles, lack of awareness, and misconceptions about their value.

The Potential Impact on Housing Supply

CoreLogic’s research highlights that there is significant untapped potential in the development of granny flats in our largest capitals. By leveraging this potential, we could see a substantial increase in the housing supply, addressing some of the current challenges faced by the market.

The study indicates that if just a fraction of suitable properties in these cities were to develop granny flats, it could result in thousands of new homes entering the market. This would not only provide more housing options for residents but also generate additional rental income for homeowners.

The Way Forward

To harness the potential of granny flats, there is a need for a multi-faceted approach. This includes:

  • Regulatory Reforms: Simplifying the approval process and addressing regulatory barriers can encourage more homeowners to consider developing granny flats.
  • Awareness Campaigns: Educating homeowners about the benefits of granny flats, both as a housing solution and a source of income, can drive interest and development.
  • Financial Incentives: Offering financial incentives or grants can further motivate homeowners to invest in granny flat development.

In conclusion, as we navigate the complexities of the housing market, it’s essential to explore all available solutions. Granny flats present a viable option that can significantly impact the housing supply in our major capitals. By recognizing their potential and taking proactive steps, we can pave the way for a more robust and diverse housing market.

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