Demand for granny flats proof of desire for housing options

South Australia’s housing crisis has driven granny flats on to house hunters’ shopping lists, with more homebuyers looking to capitalise on intergenerational living opportunities.

The perfect Aussie address is largely unchanged from 2023 as a single-level residence with a water view and a pool, a study, balcony, ensuites for the bedrooms, shed and a garage.

It also needs airconditioning and outdoor entertainment space, according to the most searched for terms on realestate.com.au in 2024.

But in the past year, the biggest increase in searches across SA has been for terms specifically relating to granny flats, up a staggering 114 per cent compared to 2023. The increase in searches is believed to be directly linked to amended planning regulations made by the state government last year.

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Under the changed planning rules, ancillary accommodation – such as granny flats – can now be leased or rented out to help ease SA’s housing crisis.

PropTrack senior economist Eleanor Creagh said more people were looking for financial flexibility on the home front.

“It’s no surprise that we have seen this increase at a time when mortgage rates remain at current high levels and the cost-of-living crisis has had an effect on many households,” Ms Creagh said.

The economist added that, with the rental market also increasingly challenging, it was probable this reflected growing opportunism among homebuyers seeking a tenant to help them pay off debt.

“I expect affordability-linked search terms such as granny flats to remain in vogue, despite expectations of an interest-rate cut,” she said.

Deakin University associate professor in property Dr Ameeta Jain said the granny flat searches were a sign of rising concerns over affordability, driven by families looking to support ageing grandparents as well as children staying at home until much later in life.

While the shift towards multi-generational living was likely being augmented by affordability, the researcher said it was likely granny flats would not be enough and Aussie homes would have to be reimagined for multi-generational living in the future.

A greater prevalence of dual-occupancy developments with two homes on a traditional house block was a more likely pathway forward, according to Dr Jain, although it might come at the expense of the classic Australian dream of a house on a quarter-acre block.

Dave and Sarah Smith of Harris Real Estate, who are selling a custom-designed home with a granny flat at 20 Young St, Blackwood, said developers were taking note of buyer needs when it came to intergenerational living.

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Dave and Sarah Smith from Harris Real Estate at 20 Young St, Blackwood, SA. Picture: Emma Brasier

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This includes Kreca Built and Designed, the SA based company behind the execution of the Young St home, which has been listed for sale with a price guide of $2.3m to $2.5m.

“Their homes are very sought after in the (Mitcham Council) foothills. They have a really strong focus, not only on a very high-end built, but generational living,” Mrs Smith said. “This home, in particular, is an interesting one, because it’s got this self-contained (building), that’s more of a studio than a granny flat, with separate bedrooms, ensuite, walk-in robe and kitchen.

“Then, when you move to the main house, the downstairs is also fully self-contained … so (the builder) really catered for almost three generations of living within the property.”

Ms Smith said homes with ancillary accommodation were increasingly in hot demand.

“What we’re seeing in the market is that young people are purchasing a house but then have to rent it out straight away to help cover the mortgage,” she said.

“So they are still living at home while they’ve got someone else paying for their house. These units or granny flats allow them to have their own space.”

Valerie Timms of Ouwens Casserly Real Estate said homes with granny flats were the future as SA struggled with increasing living costs.

“Intergenerational living is something that buyers are seeking in today’s market as it’s becoming more and more difficult for young buyers to purchase homes as a result of budgetary constraints and high interest rates,” she said.