Tap into granny (flat) power

Homeowners can boost their cashflow and help ease the housing shortage by adding separate accommodation

- Pam Walkley

Building a granny flat or studio (self-contained accommodation) in your backyard could well boost your income and help solve our housing crisis at the same time. We have the capacity to build more than 655,000 granny flats across Australia's three largest capitals, according to a recent report on the greatest opportunities for development.

The study, by the national town planning research platform Archistar, real estate construction lender Blackfort, and property data and analytics provider CoreLogic, assessed every residential block across Sydney, Melbourne and Brisbane to determine how many properties have the building potential for a self-contained two-bedroom unit.

Sydney has the most granny flat opportunities, with around 242,000 suitable properties, representing 17.6% of the metro region's housing stock. Melbourne has almost 230,000 potential sites, representing 13.2% of stock, while Brisbane has almost 185,000 suitable sites, representing 23.3% of houses across the metro region. Of the sites identified, more than a third (36%) are within two kilometres of a train or light rail station and 17% have a hospital within the suburb boundary.

CoreLogic research director Tim Lawless says 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.

"For policymakers and government, granny flats present an immediate and cost-effective opportunity to deliver much needed housing supply within existing town planning guidelines. For homeowners, the addition of a second self-contained dwelling is 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."

But there are disadvantages