‘People love it’: The feature that Sydneysiders really want in a home
Sydney Morning Herald
by Carmen ForwardFebruary 20, 2026
AI-Generated Deep Dive Summary
Sydney property buyers are increasingly favoring homes with granny flats, driven by their potential to boost property value, provide multi-generational living spaces, and offer additional income opportunities. In 2025, "granny flat" was the second-most searched term on domain.com.au in Sydney, surpassed only by "pool." This trend reflects a growing demand for flexible living solutions that cater to diverse needs, from elderly parents downsizing to investors seeking extra income streams.
Granny flats, or secondary dwellings, are defined in NSW as up to 60 square meters and typically include two bedrooms, a bathroom, and an open-plan kitchen and dining area. These compact yet functional spaces can also feature decks, verandahs, carports, or garages, enhancing their appeal for both living and recreational purposes.Builders like Wally Gebrael of Granny Flat Solutions have noticed a surge in demand, with the company constructing 300 granny flats in the past year alone—a significant jump from just eight units built a decade ago.
The popularity of granny flats aligns with broader trends in housing innovation, particularly as traditional property markets struggle to meet demand. NAB’s Denton Pugh reported a 21% increase in home renovation loans since last year, much of which has been directed toward building granny flats. This reflects a shift toward creative solutions for expanding living spaces, whether for multi-generational families or investors looking to optimize their property's value.
For instance, Haydan Andrews, a 25-year-old NAB client, chose to build a two-bedroom granny flat on his Newcastle property, anticipating long-term value and rental income. His decision was driven by the desire to add significant worth without the high costs associated with renovating or demolishing his existing home. Similarly, many Sydneysiders are recognizing the potential of granny flats as a cost-effective way to enhance their properties' appeal and functionality.
The trend also highlights the evolving priorities of homeowners in a competitive housing market. From providing privacy for aging parents to offering rental income, granny flats are proving to be a versatile and valuable asset. As housing challenges persist globally, such innovations in residential design may pave the way for more sustainable and adaptable living solutions worldwide.
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Originally published on Sydney Morning Herald on 2/20/2026