Granny Flat Surge

With supply tight, Australians are instead reinvesting in their homes, with many choosing to build Granny Flats to create more space and potentially boost income.

Analysis from NAB shows renovation loans jumped by 21% in 2025 – higher growth than the previous two years.

It says online searches from potential buyers for Granny Flats are also surging, especially in Sydney and Perth.

NAB Executive Denton Pugh says it reflects a broader shift in how Australians think about homeownership.

He says the Housing Industry Association expects granny flat builds to jump tenfold by 2026 compared to four years ago.

“People want their homes to work harder for them. With affordability still tough and rental demand rising, adding a secondary dwelling is becoming a smart, practical option. It gives homeowners extra space without stretching into a much bigger mortgage or taking on the cost of moving,” he says.

“More and more (Granny Flats are) becoming a long-term investment that strengthens the value of the property.”

Domain data shows Granny Flat is the most searched property term in Sydney, up 3.1% in the last year, while it is also in the Top Ten for searches in Perth and Adelaide.