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'Immediate' solution that could ease the housing crisis

More than 655,000 properties across Sydney, Melbourne and Brisbane could be ripe for granny flat development.

Granny flat and housing shortage.
Granny flats could help ease Australia’s housing shortage. (Source: Supplied)

If you have space in your backyard to build a granny flat, you might be part of the solution to the nation’s housing crisis and it could net you some serious coin.

Sydney, Melbourne and Brisbane could be home to an extra 655,000 granny flats - which is defined as a self-contained two-bedroom unit - new research by CoreLogic, Archistar and Blackfort has found.

CoreLogic research director Tim Lawless said granny flats presented an “immediate and cost-effective” opportunity to deliver much-needed housing supply within existing town-planning guidelines.

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And by adding a granny flat to their existing property, homeowners could stand to boost their property’s value by around 32 per cent, as well as potentially generate rental income.

“Adding a granny flat accommodates extra living space for extended family, multi-generational households or rental purposes, thereby boosting a property's value and potentially creating extra income for rising living costs,” Lawless said.

“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.”

Have you built a granny flat to live in or rent? Share your story with tamika.seeto@yahooinc.com

Sydney had the most development opportunities, with around 242,000 suitable properties or 17.6 per cent of all housing stock.

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

Of these sites, 36 per cent were within two kilometres of a train or light rail station and 17 per cent had a hospital within the suburb boundary.

Housing Australia has forecast an undersupply of 106,300 dwellings over the next five years. Rental vacancy rates are already at record-low levels across the country.

Top Sydney suburbs

Across Sydney’s regions, the Central Coast had the most granny flat development potential, followed by the Northern Beaches, Hornsby, Blacktown and Ku-Ring-Gai.

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

The top 5 suburbs were:

  1. Baulkham Hills - 4,673

  2. Castle Hill - 4,423

  3. Cherrybrooke - 3,421

  4. Carlingford - 2,901

  5. West Pennant Hills - 2,698

Top Melbourne suburbs

Within Melbourne’s regions, the Mornington Peninsula offered the highest potential for granny flat developments. This was followed by Casey, Monash, Knox and Manningham.

“Melbourne is 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,” Lawless said.

The top 5 suburbs were:

  1. Glen Waverley - 4,009

  2. Rowville - 13,741

  3. Berwick - 3,604

  4. Rye - 3,705

  5. Doncaster East - 3,397

Top Brisbane suburb

The central Brisbane area had the most granny flat opportunities on a council level, followed by Logan, Moreton Bay, Ipswich and Redland.

Lawless noted that Brisbane’s housing supply shortfall was more imminent than the other capitals, with a forecast shortage of 3,100 for newly built houses this year.

The top 5 suburbs were:

  1. The Gap - 2,986

  2. Alexandra Hills - 2,789

  3. Redbank Plains - 2,479

  4. Albany Creek - 2,378

  5. Rochedale South - 2,215

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