Granny Flats: The Surprising Real Estate Trend Taking Over Sydney
The Rise of Granny Flats in Sydney’s Real Estate Market
Did you know that “granny flat” was the second most searched real estate term in Sydney on Domain.com.au in 2024, only behind “pool” ?
The surprising real estate trend taking over Sydney’ housing market highlights growing interest and the increasing popularity of secondary dwellings as a smart investment and lifestyle choice.
Unique Ways Sydneysiders Are Paying Off Their Mortgages
A recent report by Domain Real Estate highlighting the surprising real estate trend taking over Sydney reveals that Sydney homeowners are turning to granny flats to generate additional income and ease mortgage pressures.
Some are even making an unexpected move—opting to live in the granny flat themselves while renting out their main house. Not a bad idea, especially if your main home is a lot older and too big to maintain for you as you age.
Baahouse director Claus Ejlertsen shared a compelling case about the surprising real estate trend taking over Sydney from Sydney’s Avalon, where a homeowner initially planned to lease out their new granny flat.
However, after seeing the final product, they decided it was more modern and comfortable than the main house and switched their rental strategy.
How Spacious Can a Granny Flat Be?
Under NSW legislation, the maximum internal space for a granny flat is 60 square metres. However, Ejlertsen emphasizes that clever design techniques, such as high ceilings and adding a deck, can make the space feel much larger—sometimes even more inviting than the primary residence.
“The key is in proportions, size, and scale,” he said. “Many people assume 60 square metres is too small, but thoughtful design can make it feel expansive.”
Investment and Affordability
Building a granny flat in Sydney is not just about adding space—it’s a significant financial decision. Depending on design and finishes, costs range from $200,000 to $500,000.
While this may seem like a hefty investment, the long-term rental income potential makes it a lucrative option for many homeowners.
Granny Flat Solutions director Wally Gebrael notes that the Central Coast is also seeing a boom in granny flats due to larger block sizes and affordability.
Many clients start with the idea of using the space for rental income or a family member but ultimately decide to downsize and live in the granny flat themselves.
Conclusion: The Granny Flat Boom Continues
With rising property prices and changing lifestyle preferences, granny flats have become more than just a secondary dwelling—they are now a primary choice for many homeowners.
Whether as an income stream or a downsizing solution, their appeal continues to grow, making them one of Sydney’s hottest real estate trends going forward in 2025.
