The Housing Industry Association (HIA) is urging the Federal Government to introduce a unified national framework for granny flats and secondary dwellings, arguing it could help ease Australia’s housing affordability crisis and rapidly boost housing supply.
HIA Executive Director of Planning and Development, Sam Heckel, said the growing popularity of modular and prefabricated homes shows that Australians are looking for quick and affordable ways to add housing in their backyards.
“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,” Mr Heckel said.
According to a recent HIA member survey, builders expect to construct ten times more granny flats in 2026 than they did in 2022, reflecting surging demand for smaller, affordable and flexible living options.
However, Mr Heckel warned that inconsistent planning rules across states and councils are holding back this potential.
“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,” he said.
HIA is calling for a nationally consistent framework that would allow secondary dwellings of up to 90 square metres to bypass lengthy planning processes through exemptions. The association points to Tasmania’s recent reforms and New Zealand’s streamlined approach as examples of what can be achieved.
In New Zealand, compliance with standardised design rules triggers a planning exemption, allowing homeowners to build small dwellings without the usual bureaucratic hurdles. HIA believes a similar model could work in Australia.
“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,” Mr Heckel said.
With strong demand, major retailers offering ready-made solutions, and many homeowners sitting on underused land, HIA says a national policy shift could deliver a rapid injection of new housing across the country.
