Key takeaways:
Sharing costs may help: Multi-generational living could reduce some household expenses, but renovations and additional repayments may offset savings.
Design for independence: Consider privacy, separate living areas and accessible features alongside shared spaces.
Check approvals early: Granny flat size limits and approval pathways depend on your location, property and proposed design.
Equity requires assessment: Borrowing against your home may help fund renovations, subject to your finances and lender requirements.
Agree on contributions: Discuss expenses, care responsibilities and what happens if someone moves or circumstances change.
Moving a parent in, making room for an adult child or buying a home with family can ease pressure on space and household budgets. But a multi-generational home also needs to work day to day, meet planning and building rules, and remain financially manageable for everyone involved.
With household numbers projected to rise and national rents up 5.5% in the year to September, some families are considering how to use existing space differently.
According to the Australian Bureau of Statistics’ (ABS) Household and Family Projections, between 2.7% and 3.1% of Australians are projected to be living with other relatives by 2046, up from 2.5% in 2021. These arrangements include adult children living with elderly parents, or adult siblings sharing a home.
The ABS also projects the number of Australian households to grow from 10 million in 2021 to between 13.3 million and 13.9 million by 2046.
The ABS emphasises that these projections are not predictions or forecasts. They illustrate what could happen if certain assumptions about future living arrangements hold. They provide context for housing needs, rather than predicting how many families will share a home or build a granny flat.
Before renovating or moving, consider the layout you need, the approvals required, and what you can comfortably afford.
Why are families considering multi-generational living?
Living together may help families reduce some housing costs, support older relatives and share everyday tasks. For adult children, contributing to household expenses rather than paying separate rent could leave more room to save for a first home.
Cotality’s October 2026 Home Value Index shows national rents rose 5.5% over the year to September.
“Anecdotally, renters are likely to be looking for any way possible to minimise their rental costs, such as larger households, multi-generational housing options or looking for smaller or further afield rental options,” said Cotality research director Tim Lawless.
For your family, weigh potential savings against renovation costs, additional repayments, and ongoing support needs.
Multi-generational living: benefits and trade-offs
Potential benefits | Potential trade-offs |
|---|---|
Family members may share mortgage, utility, food or care costs. | Renovations, extra services and ongoing household costs can add up. |
Older relatives may stay close to family and receive practical support. | Caring responsibilities and expectations need to be agreed, not assumed. |
Adult children may have more time to save or plan their next move. | Privacy, noise, routines and parenting styles can become points of tension. |
A flexible layout may suit changing household needs over time. | A granny flat or extension does not guarantee a higher resale price. Its impact depends on local demand, build quality, approvals and the space given up elsewhere. |
Shared living can make some costs easier to manage, but it does not automatically make a larger loan affordable.
Compare the household's combined costs and contributions with the costs each person would otherwise pay, including loan repayments, utilities, maintenance, transport and care.
What to look for in a multi-generational home
A suitable home gives each household access to shared space and somewhere to retreat. If you are inspecting properties, or planning a renovation, consider:
Separate living zones: A second lounge, retreat, or study can help people follow different routines without being isolated from one another.
A bedroom and bathroom on the ground floor: This can reduce reliance on stairs and may make the home more adaptable if mobility needs change.
Privacy and access: Look for a private entrance or check whether one can be added. Separate entrances can help family members keep independent routines.
Kitchen and bathroom capacity: A second kitchenette or bathroom may ease morning pressure. Confirm whether the proposed space is allowed to include cooking facilities and whether it would be classed as a secondary dwelling.
Step-free access and safer fittings: Consider step-free routes, wider doorways and halls, lever-style handles, non-slip flooring, good lighting, and a walk-in shower with appropriately installed grab rails.
Parking, storage and outdoor space: More adults may mean extra vehicles and belongings. Check driveway capacity, accessible paths, and whether the outdoor area can still be shared comfortably.
Sound separation and climate control: Insulation, doors between zones and separate heating or cooling controls can improve comfort and privacy.
A secondary dwelling, often called a granny flat, is generally a self-contained but subordinate home on the same property as the main dwelling. A studio, converted garage or sleepout is not automatically an approved dwelling. Definitions, size limits and approval requirements vary by state and territory.
Before relying on it for permanent accommodation or rent, check its planning and building approval status with the relevant authority or a licensed building certifier.
You might also be interested in: How to use home equity to renovate your property
What are the granny flat rules in NSW, Victoria and Queensland?
There is no single national granny-flat size or approval pathway. Rules depend on the planning scheme, lot, zoning, overlays and design. The figures below are a starting point, not confirmation that a specific property can be developed.
State | What the current guidance says | What to check before designing |
|---|---|---|
New South Wales | A secondary dwelling can be up to 60-square-metres under the state pathway. To use complying development, the lot must generally be at least 450-square-metres and the proposal must meet the Housing SEPP and other applicable standards. An eligible complying development certificate (CDC) can be assessed within 20 days. | The 450-square-metre threshold is for the complying-development pathway, not a guarantee that a granny flat is permitted on every lot of that size. If the site or plans do not qualify, a development application (DA) or another pathway may be needed. The 20 days is an assessment timeframe, not the time to design and build. Check the NSW Planning Portal and the complying development guidance. |
Victoria | A small second home of 60-square-metres or less does not need a planning permit in most cases, but a building permit is still required. Special planning controls can change the pathway. In residential zones, small second homes on lots under 300 m² generally require a planning permit, except in the Low Density Residential Zone. | Confirm the zone, overlays, siting and building requirements with the Victorian planning authority and council. The permit exemption is not a building-permit exemption. |
Queensland | Since 23 September 2022, a secondary dwelling can be rented to someone who is not related to the main household. Building approval is required, and council can tell you whether development approval is also needed. | Queensland does not provide one automatic approval pathway for every lot. Brisbane City Council uses 80 m² as a threshold in some family-occupied secondary-dwelling rates-relief criteria. That is not, by itself, proof of a universal planning size limit. Check the current local planning scheme and the Queensland guidance on granny flats and occupancy changes. |
Note: This table reflects government guidance available at the time of publication. Planning and building rules are subject to change, and requirements vary by location and property. Confirm the current rules with your local council or a qualified planner or building certifier before proceeding.
Rules in Western Australia, South Australia, Tasmania, the ACT and the Northern Territory also depend on local planning controls.
Start with the state planning authority and council for the property address, and confirm the pathway with a qualified planner or building certifier before paying for detailed plans or construction work.
How can you adapt your home and fund the changes?
Compare three options: making smaller changes inside the existing home, extending it or adding a self-contained dwelling.
If your block cannot accommodate the required layout, moving may be another option. Compare the renovation budget with the full cost of buying and selling, including transaction costs and moving expenses.
Build a complete renovation budget
For a granny flat renovation or new build, request itemised quotes based on the same scope. Check whether they include:
Design, engineering, surveys and approval fees.
Site preparation, excavation and drainage.
Foundations and any retaining walls.
Water, sewer, electricity and other service connections.
Kitchen, bathroom, heating and cooling.
Accessibility features, paths and landscaping.
Temporary accommodation, where needed.
A contingency for unexpected work.
Ask what is excluded and how variations will be priced. A building quote that leaves out service connections or site work may understate the amount you need to fund.
Also compare the ongoing household budget before and after the move. Include additional repayments, insurance, utilities, maintenance and any paid care that will still be needed.
Understand how much equity you may be able to access
Equity is the difference between your property’s value and the amount you owe. A loan increase or cash-out refinance means taking on additional debt. Refinancing an existing balance may not.
As an illustrative starting point, suppose:
Calculation | Amount |
|---|---|
Lender-assessed property value | $900,000 |
Existing mortgage balance | $570,000 |
Total equity | $330,000 |
80% of the property value | $720,000 |
Illustrative gross equity above an assumed 80% LVR (before costs and subject to valuation, lender policy and serviceability). | $150,000 |
The calculation is $720,000 minus $570,000.
This assumes an 80% loan-to-value ratio for illustration. It is not a universal lending limit or an approval amount. The lender would assess your income, expenses, other debts, property and proposed works.
If approved, the $150,000 could contribute towards renovation costs. It does not establish that the full project would cost $150,000 or that the additional repayments would suit your budget.
An Aussie Broker can help assess your borrowing position and compare suitable lending options.
Match the finance to the work
Depending on the project and lender, options may include increasing your existing loan, refinancing or using a construction loan with staged payments.
Ask how funds will be released, which contracts and approvals are required, and how repayments will work during construction.
Compare fees, interest rates and the loan term. Extending the repayment period may reduce monthly repayments while increasing total interest paid.
Consider bridging finance if you are moving
Bridging finance may help eligible borrowers buy another property before selling an existing one.
It can involve higher temporary debt, additional interest and a deadline to sell. Ask how the loan would work if the sale takes longer or achieves less than expected.
Where parents intend to contribute sale proceeds, confirm the ownership and lending arrangements before relying on those funds.
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Check support against your circumstances
Planning reforms do not automatically provide funding for a build.
Queensland Revenue Office states there is no specific “granny flat grant”. However, an eligible first-home buyer building a detached dwelling on a relative’s land may qualify for the first home owner grant.
The building contract must be in the applicant’s name, and all other eligibility requirements apply. An existing homeowner building accommodation for a family member should not assume they qualify.
Confirm any assistance directly with the relevant government agency before including it in your budget.
You might also be interested in: First-home buyer grants and concessions in Australia
Family conversations that can make shared living work
A good floor plan helps, but it cannot settle questions about money, privacy or care. Talk through expectations before a move or renovation begins. Useful questions include:
How long do we expect this arrangement to last, and what might change that plan?
How will we divide the mortgage, bills, groceries, repairs and unexpected costs?
Who will make decisions about shared areas, visitors, pets and quiet hours?
What care or childcare support is expected, and what is outside each person's capacity?
Which spaces are private, and how will everyone get time alone?
If a person wants to leave, or the property is sold, how will contributions be handled?
Write down practical agreements, including contributions and responsibilities, and get legal advice where property ownership or substantial funds are involved. Revisit the agreement as household needs change. The aim is not to formalise every family interaction, but to reduce avoidable misunderstandings.
Plan the next step before you commit
Before choosing between a renovation and a move, make a short checklist: confirm the planning pathway, get an initial design and itemised costings, agree on how the household will share costs, and test whether the repayments remain manageable if circumstances change. A multi-generational home can suit some families, but it is not automatically cheaper or more valuable than living separately.
An Aussie Broker can help you understand your borrowing power, compare loan options and consider whether using equity or bridging finance may fit your circumstances. Start with the numbers and approvals, then make the design and family decisions with a clearer view of what may be achievable.