Demand for electric vehicles has increased across Australia from both businesses and households as they look to reduce exposure to volatile fuel costs and futureproof their transport needs, new NAB insights reveal.
27 March 2026 | 2 min read
25 March 2026
Australians are rethinking their backyards – and it’s not just about a new lawn or fancy decking. NAB data shows renovation loans have jumped 21% in 2025, surpassing growth seen in the previous two years. Many homeowners are using this financing to build granny flats to create more space, boost income and unlock extra value from the land they already own.
Searches for “granny flat” are also surging on property platforms, especially in Sydney and Perth, as people look for practical ways to support family, add a second income stream or plan for future needs. The Housing Industry Association expects granny flat builds to jump tenfold by 2026 compared to four years ago.
NAB Executive Denton Pugh says it reflects a broader shift in how Australians think about homeownership.
“People want their homes to work harder for them. With affordability still tough and rental demand rising, adding a secondary dwelling is becoming a smart, practical option. It gives homeowners extra space without stretching into a much bigger mortgage or taking on the cost of moving,” Mr Pugh said.
“A well‑designed granny flat is more than just four walls. We’re seeing families use them to stay closer together - whether that’s giving ageing parents a safe, comfortable place to live nearby, or helping adult children stay at home longer as they look to enter the property market. They can give people the room they need as life changes, or generate steady rental income. More and more, they’re becoming a long-term investment that strengthens the value of the property.”
NAB customer Haydan Andres, outside his newly built granny flat
For NAB customer Haydan Andrews, building a granny flat was about smarter planning, boosting long‑term value and making the most of his Newcastle block.
“When I first bought the place, I actually thought I’d knock down the existing house and do a full redevelopment. But once I started getting quotes, it was clear it would blow the budget massively,” Haydan said.
The 25-year-old kept the original front house and built a new granny flat in the backyard - turning the single-dwelling block into two sperate living spaces.
“Switching to a granny flat just made more sense. The numbers stacked up straight away - lower build cost, quicker turnaround, and rental demand in Newcastle is strong. It meant I could still grow the property without giving myself more of a financial headache.”
After living in the front house for a year, Haydan said the block’s layout helped him plan the project properly.
“The side access, the size - it all worked. I didn’t want to rush it. I wanted to build something that adds value long‑term.”
Designing it with future tenants in mind was also important.
“I didn’t want tenants feeling like they were stuck in someone’s backyard with zero privacy. So I designed it to feel like its own little place. It’s better for them, and it means both houses can do their own thing.”
In the end, he says the project was about giving himself options.
“I underwent this process to set myself up. Whether I keep the place or sell it later, the granny flat gives me options - and that’s the whole point.”
Notes:
According to Domain data, search interest in “Granny Flats” was the most searched term in Sydney with a 3.1% increase. Additionally, the terms was pushed into the top 10 most-searched keywords for Perth (+59.8%) and Adelaide (+24.4%).
