The housing crisis is expected to worsen in Australia’s three largest cities, but many property owners have the ability to help ease the crunch.

A new report from Archistar, Blackfort, and CoreLogic reveals 655,000 properties across Melbourne, Sydney, and Brisbane are suitable for constructing a two-bedroom granny flat. 

By building additional housing in an existing property’s backyard, owners could increase their home’s value, realise rental income, and take the strain off the property market.

“Since granny flat developments leverage existing lot areas and require no changes to town planning regulation, they offer an immediate opportunity to address housing shortages and affordability pressures expected in the coming five years for both buyers and renters,” Archistar co-founder Dr Benjamin Coorey said. 

The Housing Industry Association (HIA) recently found the crux of Australia’s housing crisis is a shortage of land on which to build. 

HIA Senior Economist Tom Devitt warned the time needed to release land for the  construction of new homes could prove “a major roadblock” to the government’s recently bolstered plan to build 1.2 million homes over the five years starting 2024.

Housing Australia expects the nation's housing market will likely be undersupplied by more than 106,000 dwellings over the coming five years, CoreLogic research director Tim Lawless notes. 

Brisbane is already feeling the impact of a supply crunch, with the Queensland capital expected to face a shortage of 3,100 homes this year.

Meanwhile, Sydney and Melbourne are expected to face a deficit of 12,100 dwellings and 23,800 dwellings respectively between 2023 and 2027.

Looking further across the nation, just 1.06% of rental properties were vacant last month – a new record low, PropTrack data reveals.

In the midst of the crisis, more Australians are turning to tiny homes in an effort to secure housing.

Eddie Davies, co-founder of tiny home builder Tiny Mobile, told that the company’s 7.5 metre-by-2.5 metre homes can offer first home buyers a stepping stone into the property market.

“For homeowners, the addition of a second self-contained dwelling provides 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,” Mr Lawless said.

“CoreLogic figures show an extra two bedrooms, and an additional bathroom could add around 32% to the value of an existing dwelling.

“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.”

Sydney was home to the lion’s share of potential granny flat sites, with 242,000 properties, or 17.6% of housing stock,  found to be suitable for a standalone unit.

Melbourne boasted close to 230,000 potential sites (13.2% of housing stock) and Brisbane had almost 185,000 suitable sites (23.3% of housing stock). 

Of the properties found to be suitable across the three cities, 36% were within two kilometres of a train or light rail station and 17% were in suburbs with a hospital. 

That means many could help provide a fast-track solution to house essential workers in the healthcare industry. 

The Queensland Government moved to allow homeowners to rent out detached granny flats last year in a bid to increase housing supply.

The Victorian Government also recently revealed plans to scrap the planning permit process for homeowners looking to build a granny flats, as long as they're under 60 square metres. 

Image by Freepik.

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