Savvy homeowners are realising the potential of granny flats, studios and secondary dwellings on their landholdings to meet family needs, increase income, and help ease widespread housing shortages.

Depending on your personal circumstances, adding a granny flat or studio to your home could be a welcome inclusion, particularly if you have a large extended family or teenagers who want their own space. You may require separation to work from home or might be looking to supplement your income with a rental.

MARQ Licensed Agent Rachel Anasson said adding a granny flat or studio effectively meant more options for homeowners, and could potentially help ease affordability pressures.

“A granny flat or second dwelling opens up the potential of your home,” Rachel said.

“In Canberra, we are seeing a lot of multi-generational purchasers in the current market. It’s not just Mums and Dads or young couples buying homes. It’s Mum and Dad plus their parents, or Mums and Dads purchasing homes with their kids.

“The advantage is you can have the primary residence for the larger family and the other part of the generational family can live in the other section.”

Rachel cited MARQ’s recent sale of 22 Nulsen Circuit, Flynn, which included the original three-bedroom home as well as a secondary two-bedroom residence on an 865sqm lot.

“It was families who were mostly interested in that property,” she said. “They wanted to combine debt to reduce the mortgage. The kids were selling, the parents were selling and they wanted to buy one bigger property together.

“And that is happening more and more. These sorts of properties are always very popular.”

Rachel said not only did granny flats provide more cost-effective living for extended families, but there was also potential to rent out one dwelling to tenants or as short stay accommodation.

“It really does depend on how the extra dwelling is built, whether it’s for habitable purposes and whether it’s separately metered, but it can certainly add extra income in the current climate,” she said.

“We have found that, especially with how tight money is getting with current cost of living pressures, some owners even live in the smaller residence and rent out the larger one.”

However, homeowners must also be careful not to overcapitalise or spend more than they’re likely to get as a return for a granny flat addition if they were to sell the home.

A report by CoreLogic, town planning research platform Archistar and real estate construction lender Blackfort, released in October, found there was a great deal of untapped development potential in granny flats, which could help remedy housing shortages in bigger Australian cities.

It is estimated that the national housing market will be undersupplied by 106,300 homes in the next five years.

“Adding a granny flat accommodates extra living space for extended family, multi-generational households or rental purposes, thereby boosting a property’s value and potentially creating extra income for rising living costs,” said CoreLogic’s Tim Lawless.