National granny flat framework could unlock thousands of new homes: HIA
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The Housing Industry Association is calling for a unified national framework for granny flats and secondary dwellings to help ease housing affordability pressures, arguing Australia could learn from recent changes in Tasmania and reforms in New Zealand.
HIA said recent changes in Tasmania to permit granny flats of up to 90 square metres, along with New Zealand’s moves to fast-track compliant small homes, showed how planning reform could help unlock more housing supply.
“The growing popularity of modular homes and other modern building systems, including those now available through major retailers, proves that many Australians want quick, modern and simple ways to add density to their backyards,” said HIA Executive Director of Planning & Development, Sam Heckel.
“As demand for diverse housing options surges, HIA’s member survey reveals that builders expect to construct ten times more granny flats in 2026 than they did in 2022. This exponential growth highlights the growing demand for smaller, affordable and modular living solutions.
However, Mr Heckel warned that the full potential of this housing solution was being constrained in Australia by a patchwork of inconsistent planning rules.
“Inconsistent regulations across state and local government lines are adding unnecessary complexity and thousands of dollars in hidden costs which often do not improve outcomes.
“We need a nationally consistent framework that allows secondary dwellings or granny flats up to 90 square metres to bypass lengthy planning queues through planning exemptions”, said Mr Heckel.
HIA pointed to recent reforms in New Zealand as a model for success, where compliance with standardised design rules triggers a planning exemption, allowing homeowners to build without the traditional bureaucratic hurdles.
“The Federal Government should take the lead by establishing national design standards. By removing the need for costly, bespoke planning processes, we could unlock thousands of homes in established city suburbs and also regional areas,” said Mr Heckel.
“With strong demand, major retailers now offering off the shelf solutions and many homeowners with underutilised land, the right nationwide policy shift could deliver a rapid injection of housing supply across Australia,” concluded Mr Heckel.