Housing shortage has long been a serious issue in Australia, especially in major cities where it has been increasingly prominent. However, a new study has found that families can build an independent unit called a "granny flat" in their backyard to address this issue.

Conducted by CoreLogic, Archistar, and Blackfort, the study revealed the potential for an additional 655,000 granny flats in Sydney, Melbourne, and Brisbane. According to the study's lead researcher, Tim Lawless, granny flats provide a "direct and cost-effective" opportunity to deliver much-needed housing supply within existing urban planning guidelines.

By building granny flats, homeowners can increase the value of their properties by approximately 32% and potentially generate rental income. Additionally, adding a granny flat can provide additional living space for extended families, multi-generational households, or rental purposes, thereby increasing the property's value and potentially creating additional income to sustain the rising cost of living.

The introduction of elderly housing, as seen in Taiwan, is now gaining popularity in Australia, with homeowners adding granny flats to their existing properties, increasing the value of the house by approximately $160,000 AUD. Of these potential lands, approximately 36% are within two kilometers of a metro or light rail station, with 17% having a hospital within the urban area.

According to Housing Australia forecasts, there will be a shortage of 106,300 homes in the next five years. Rental vacancy rates across the country have reached historically low levels.

Among the various regions in Sydney, the Central Coast has the greatest potential for granny flat development, followed by the Northern Beaches, Hornsby, Blacktown, and Ku-Ring-Gai.

In Melbourne, the Mornington Peninsula has the most significant potential for granny flat development, followed by Casey, Monash, Knox, and Manningham.

In the central areas of Brisbane, there are the most opportunities for granny flat extensions, followed by Logan, Moreton Bay, Ipswich, and Redland.

Furthermore, this study suggests that Sydney and Melbourne will face severe housing shortages in the coming years, with Brisbane's housing supply issue being even more urgent.

It is estimated that from 2025, the number of households in Sydney will exceed the housing supply, with the most severe shortage expected in 2025, continuing into 2026, reaching 15,900 homes.

In various regions of Melbourne, the Mornington Peninsula has the most significant potential for granny flat development, followed by Casey, Monash, Knox, and Manningham. In the central areas of Brisbane, there are the most opportunities for granny flat extensions, followed by Logan, Moreton Bay, Ipswich, and Redland.