A Solution to the Housing Crisis

Granny Flats in Melbourne

Melbourne is currently facing a severe housing crisis, with a projected deficit of 23,800 dwellings over the next five years. The most significant shortage is forecast for 2025 through to 2028, but the undersupply of new housing is expected to continue. This is the largest projected shortfall among Australia’s major cities, making it increasingly difficult for many Melbourne residents to find affordable housing.

Granny flats offer a practical and efficient solution to this challenge, providing a way to quickly increase housing options without the need for extensive new construction that takes time to be approved and completed.

Archistar CoreLogic Blackfort Granny Flat Report Image

Can I build a Granny Flat at my address?

Your property may be one of the 655,000 identified as being suitable for a granny flat. Find out by clicking through to this search tool created by Archistar & Blackfort.

Archistar identifies Granny Flats in Australia

Unlocking Melbourne’s Housing Potential

There is a huge opportunity for granny flats across the metro, which would alleviate Melbourne’s housing shortage substantially. Our data reveals that 229,051 properties across the Melbourne metro area are suitable for granny flat development. This is 13.2% of all properties in the region, highlighting a vast untapped opportunity to create more housing.

Notably, nearly half of these properties are conveniently located within 2km of a train or light rail station, and 23.3% are in suburbs with a hospital, making them attractive options for a wide range of potential occupants.

Top Suburbs for Granny Flat Development in Melbourne

Mornington Peninsula; Casey; Monash; Knox; Manningham; Boroondara; Whitehorse; Banyule; and Maroondah are the council areas with the most opportunities, with each having more than 10,000 potential sites. The top 5 suburbs across the metro are:


Suburb NameNumber of Potential Granny Flat Sites
Glen Waverley4,009
Doncaster East3,397

Financial Benefits for Melbourne Homeowners

Building a granny flat in Melbourne offers the potential to increase your property value by 32%, making it wise investment.

There is also the weekly rental income to consider, providing a steady stream of cash flow you can use to cover other expenses or even add to your mortgage payments.

Why Build a Granny Flat in Melbourne?

Melbourne has a thriving cultural scene, a diverse economy, and—most notably—a fast growing population. Making it an ideal location for granny flats.

The demand for rental properties over the next decade will remain high, so there is little risk of your granny flat staying vacant for too long. They are an affordable housing option for many, and by building a granny flat, you can tap into a dynamic market that offers significant financial returns.

Regulatory Considerations in Melbourne

Naturally, there are state and local council rules and regulations to consider before you start planning your granny flat. First you would need to ensure the zoning of your property allows for a secondary dwelling. And then you need to look at the other building regulations that could affect the project.

The Victorian Government did introduce new rules that make it easier to build a second dwelling on your property. Although a building permit is still needed, if the granny flat and your own property meet very specific requirements, no planning permit is needed. This can save a significant amount of time.

However, it is still recommended that you consult with professionals, and clearly understand the requirements for a small second home.

Is your Melbourne property suitable for a granny flat? Find out by using our address search tool and take the first step towards unlocking the hidden potential of your home. If it is, you can use Archistar to generate hundreds of potential designs based on the new planning and building framework.

Archistar identifies Granny Flats in Australia

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