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Tasmania caters to demand for granny flats with increase in allowable size
The Tasmanian government will soon increase the maximum size of granny flats, boosting housing supply and ensuring more options for renters.
Under the new change, the state will increase the allowable size of granny flats from 60m2 to 90m2, a 50 per cent rise.
The current size restriction usually only allowed a single bedroom, even when a kitchenette and bathroom were included, but the change will allow for more two-bedroom flats.
Minister for Housing and Planning, Kerry Vincent, said the expansion will give Tasmanians more rental choice.
“Having a small, self-contained dwelling located on existing blocks represents low-hanging fruit as we look to increase our medium-density housing stock,” he said.
“By expanding this size, we can create more diverse housing stock, giving Tasmanians greater options for where they can live.”
Vincent said the state government was committed to delivering for Tasmanians by making tweaks that would continue to improve outcomes.
The changes came following the popularity of flat-pack tiny homes as a do-it-yourself (DIY) solution to density issues.
Following the Tasmanian government’s announcement, the Housing Industry Association (HIA) has called for a unified national framework for granny flats and secondary dwellings to ease housing affordability.
HIA executive director of planning and development, Sam Heckel, said the popularity of modular homes and other modern building systems showed that many Australians wanted quick, modern and simple ways to add density to their backyards.
“As demand for diverse housing options surges, HIA’s member survey reveals that builders expect to construct ten times more granny flats in 2026 than they did in 2022,” he said.
“This exponential growth highlights the growing demand for smaller, affordable and modular living solutions.”
Heckel argued that inconsistent planning rules across state and local government lines were adding complexity and thousands of dollars in hidden costs, causing a burden for home owners.
“We need a nationally consistent framework that allows secondary dwellings or granny flats up to 90 metres to bypass lengthy planning queues through planning exemptions”, Heckel said.
The demand for self-contained dwellings as income-generating properties has also been seen in search results, with Domain’s 2025 End-of-year-wrap report finding “granny flat” and “dual” surged to the fourth and fifth most commonly searched terms nationally.
According to Maple CEO Beau Arfi, demand for ready-to-go granny flat kits was increasing, with investors opting for dual-income strategies rather than just buy-and-hold single dwellings.
He said granny flats were no longer a niche idea and were becoming core infrastructure for the next stage of residential supply.
“People are sitting on goldmines in their own backyards,” he concluded.