Recent research featured in major media outlets has revealed a surprising fact: up to a million residential properties across Australia may have the space and zoning potential to accommodate a granny flat.
Notably, Sydney, the Central Coast, and Newcastle emerged as the areas with the highest number of properties suitable for secondary dwellings — highlighting the sheer scale of untapped opportunity for homeowners and investors alike.
Top 50 Suburbs With Granny Flat Potential
Some of the top-performing suburbs with the most opportunities include:
Sydney Region
Baulkham Hills, Castle Hill, Cherrybrook, Carlingford, West Pennant Hills, Frenchs Forest, St Ives, Epping, Wahroonga, Blacktown, Pymble, Turramurra, Winston Hills, Quakers Hill, Kellyville, St Clair, St Marys, Beecroft, Seven Hills, Greystanes, Ryde, Hornsby, Eastwood, Belrose, North Rocks, Kings Langley, Forestville, Cranebrook, Killara, Bradbury, Strathfield, Ashfield, Glenmore Park, Thornleigh, Roseville, Doonside, Mount Colah, Hornsby Heights, North Ryde, Allambie Heights, Beacon Hill, South Penrith
Central Coast & Newcastle
Wyoming, Bateau Bay, Terrigal, Umina Beach, Narara, Berkeley Vale, Avoca Beach, Killarney Vale, Green Point, Gorokan
If you own a home in one of these areas, adding a granny flat could be a smart next move.
Granny Flats and Tax Deductions in Australia
One of the reasons granny flats have become so attractive to property owners is the potential for tax deductions. When built and rented out under the right conditions, granny flats can be income-generating assets — and the associated expenses may be deductible.
Want to understand how it works? Take a look at our Guide to Making Your Granny Flat Tax Deductible.
Why Granny Flats Are Gaining Popularity
As property prices rise and the housing supply remains under pressure, many Australians are turning to granny flats as a practical solution — both financially and socially.
Whether it’s to generate rental income, provide space for adult children or ageing parents, or increase property value, granny flats offer homeowners flexibility and long-term benefits. And with rental demand surging across NSW, especially in metro and coastal regions, the timing has never been better.
The Benefits of Building a Granny Flat
Granny flats (or secondary dwellings) are no longer just for grandparents. Here’s why more people are building them:
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Earn Extra Income
Renting out your granny flat can provide a reliable second income to help pay the mortgage or fund other goals. -
Increase Your Property Value
A well-designed granny flat can significantly boost your home’s market appeal and resale value. -
Enjoy Flexible Use
Perfect for multigenerational living, guest accommodation, or future downsizing without leaving your neighbourhood. -
Contribute to Local Housing Solutions
In regions facing tight rental markets, offering a secondary dwelling can provide much-needed affordable housing options. -
Potential Tax Advantages
Depending on how your granny flat is used, you may be eligible for tax deductions on expenses like maintenance, depreciation, and insurance.
Granny flats represent a smart, future-proof strategy for homeowners looking to get more from their property — especially in high-demand areas like Sydney, Newcastle, and the Central Coast.
If you’re considering building a granny flat, get in touch with our experienced team to discuss the possibilities for your site. Whether it’s for family, lifestyle, or rental return, we’ll help you make it happen.