Originally published February 2013. Reviewed 7 October 2026. This article records the early growth of granny flats in Australia. Its market observations describe that period; they are not current investment forecasts. Planning requirements differ by state and property. For current Sydney guidance, start with our NSW granny flat regulations guide and approval guide.
The Definitive Granny Flats Australia Guide
The Australian Granny Flat Boom
Granny Flats in Australia are a relatively recent phenomenon and are technically termed ‘Secondary Dwellings’ here in NSW. The Canadians are now building them and the Europeans have been building them for decades. The English have been converting garages into additional living spaces for even longer. But the overriding motivation to the global rise in granny flats has been demand. The demand for affordable rental housing is rising as cities become more and more populated. It’s a global trend that is on the rise.
A Changing Landscape
Until recently, Australian properties were typically quite large, with smallish homes and huge back yards. This has all changed though, with newly established estates boasting massive two storey homes and only modest rear yards. So the trend has flipped from the days of fibro cottages on 1000 sq m blocks. This is part of a growing trend across all Australian cities and regional centres. With demand for space rising and supply dwindling, granny flats are a logical progression in providing much needed affordable housing. They’ve been earmarked by State Government’s as the saving grace to the rental crisis. In the Sydney outer suburbs, granny flat construction is booming. The suburbs with the most growth are:
- Blacktown Region
- Campbelltown Region
- Penrith Region
The remaining developments are spread across many of Sydney’s other main suburbs. Recently, we’ve approved quite a few secondary dwellings in Sydney’s Northern Beaches suburbs like Manly, Brookvale and Pittwater. Other popular areas include the Bankstown region, Parramatta and Ryde. Granny flats are now legislatively endorsed as a solution to the Australian housing crisis. The income which can be generated in regional towns has not being ignored either.
Australia’s Growing Rural Trend
Many savvy investors in NSW Rural regions are also seeing the benefit of developing their own land. With lower interest rates comes increased borrowing capacity as well. Many rural regions are seeing a rise in granny flat development, especially in mining towns like:
- Ipswich Granny Flats
- Mt Isa
- Newcastle
- Orange
- Parkes
- Ballarat
- Bendigo
- Newcastle
- Cobar and
- Cooper Pedy, just to name a few
Granny Flat Sizes and Current Planning Rules
There is no single Australia-wide size or rental rule. The Queensland and former Hurstville and Kogarah council examples in the original 2013 article have been removed because they should not be used as current planning advice. In NSW, the approval pathway depends on the property and the applicable controls. Check the NSW Government secondary dwelling guidance, relevant legislation and your council before relying on a proposed layout.
Who Builds Granny Flats?
Granny Flats are a new development trend in Sydney. Many home occupiers are gaining approval and then build them in their own back yards as owner builders. Investors, on the other hand, are hiring builders to complete their project from start to finish. This includes design, approval and construction. After construction there’s usually more work to do such as laying turf, installing additional parking, installing an extra clothes line, adding mail boxes and additional garbage collection.
Granny Flat Prices – The Good, The Bad and the Outrageous!
The rising trend has availed many builders to stop building homes and focus instead on building granny flats. The simplicity and relative ease of building granny flats has seen a growth in builders moving to this type of development. In 2009, there were only two or three builders in NSW. Today, we see dozens of would-be granny flat builders emerging. The important concern for investors is ensuring they are charged fairly for their granny flat development and that they’re getting quality inclusions for their money. Many kit home companies are also jumping on the bandwagon with what seems to be a cheaper option. But are these prices true representations of a complete build or just dangerous advertising? Are kits up to the required standard? Is building granny flats the same as building houses? Who can you trust? See below on how to stay tuned with granny flat trends across NSW and Australia.
Granny Flats are Unique Buildings
Granny Flats are different to main dwellings insomuch as they must be designed to exist in harmony with the main dwelling. They should not dominate or detract from the front house, nor should they be unsightly. Sewer, electricity, water and communications connections need site-specific planning. Confirm the connection arrangements, service capacity and provider requirements before construction. The most important aspect of a granny flat is that it must be sited to create privacy and separation from the front house. This means promoting separate open spaces plus adequate acoustic and visual privacy. It’s vitally important that these dwellings be designed by experienced people who are genuinely interested in the end result. Will your new granny flat be attractive to tenants, today and forever?
Granny Flats now and into the Future
There’s no doubt that we’ll be seeing a lot more granny flats being built right across Sydney and the rest of Australia. Local and State Governments have recognised the need but are also concerned about the impact to infrastructure and the overall impact to the neighbourhood. Their concerns are valid. As more and more of these buildings are constructed, we’ll no doubt see new regulations about materials used, articulation and aspect. These buildings should be sited and created to be sympathetic to the natural and built environment. New developers should get themselves involved with peer groups. These groups will advise them on who to employ for the design, approval and construction. The bottom line is that it pays to use people who build granny flats every day. Check out their completed work and talk to their previous clients. This is the best way to ensure you’re being treated fairly with regard to price and quality.
Before Starting a Granny Flat Project
Assess the property, approval pathway, design and full project budget before committing to a build. A granny flat is not permitted on every site, and an approval timeframe depends on the application and required reports. Compare our approval cost calculator with the separate build price calculator, then discuss site conditions with our team.
Stay Tuned
This article was originally written in February 2013. For further reading, browse these five guide collections and check the publication or review date of each article:
1. Granny Flat Approval Guides
2. Granny Flat Building Guides and Tips
5. Garage into Granny Flat Conversion Guides
These five categories cover the latest news in Australia and more specifically for Sydney and Rural NSW. We invite you to subscribe to our blog and to visit our website for regular updates on all things relating to granny flats in Australia.
About the Author: Serge Panayi is the Owner and Designer at GrannyFlatApprovals.com.au. He regularly contributes to national development workshops and forums on residential development in Sydney.
