- Young Kiwis struggling to enter the property market are driving a rise in granny flats.
- Elsewhere Pods reports increased demand for modular dwellings from families housing adult children.
- New rules allow easier construction of flats up to 70sqm, with Auckland Council receiving 215 applications.
Young Kiwis locked out of the property market are sparking a revival in granny flats.
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Elsewhere Pods, which builds modular sleepouts and minor dwellings, said the majority of enquiries for its products have come from those wanting to create space for young adults.
“We are seeing adult children moving in with their parents. They go off to university, and when they start working, they can’t afford a place themselves, so they move into their parents’ backyard,” NZ general manager Karel Bietje told OneRoof.
Mortgage company boss Andrew Chambers said it was not only a trend he’s noticed within the market, but it was also something he’s planning for his own backyard.
“I’m 54, I’ve got two adult kids; there’s no way they’re going to get to where we got in our 20s in terms of first-home buying.”
The Tella CEO said his children have done everything right, but the housing landscape had changed. “It’s Generation X, sandwiched between the boomers and the millennials, who didn’t have the best run in terms of capital gains on property, property valuations. They were also the first generation to have student loans.”
The minor dwellings that Elsewhere Pods is bringing to the market are a step above the traditional sleepout. Photo / Supplied
Adult children who can’t afford to move out of home can find a space of their own in the next generation of “granny flats”. Photo / Supplied
Stats NZ data shows more than one in three families with children had adult children living with them in 2023, up 27% on the previous decade.
Tiny Homes HQ’s Matt Armstrong said affordability was a factor, but attitudes to multi-generational living were also shifting. “People used to be embarrassed about it. They said, ‘Our kids need to go out into the world’.”
New rules rolled out this year have made it easier for home owners to build granny flats up to 70sqm in size without building consent. Auckland Council said it was too early to assess the impact of those changes, but it has already received 215 applications for Project Information Memorandums (PIMs), which are council checks required for granny flats built under the new exemption.
OneRoof data shows that searches for properties by land size have more than doubled in the past year, and searches for granny flats are also up 25% in the last six months, although from a low base.
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The trend has caught the attention of major retailers too, with Bunnings NZ partnering with Elsewhere Pods to sell flatpack backyard studios.
Elsewhere Pods said the products, which start at just over $31,000, fit the Kiwi DIY culture. “Build the whole kitset, and it will cost you a couple of beers for your mates, and it’s done over a weekend. And if you have more mates, the faster it will be,” Bietje said.
Elsewhere Pods said the traditional granny flat no longer reflected how people use the spaces. “The word granny is quite a general term for it. We call them backyard studios,” Bietje said.
Tella CEO Andrew Chambers: “I’m 54, I’ve got two adult kids; there’s no way they’re going to get to where we got in our 20s in terms of first-home buying.” Photo / Supplied
While interest was growing, mortgage brokers said people still needed to make the numbers work. “I think if this had come in when interest rates were 2.99%, it would be huge,” Squirrel mortgage broker Emma Wallace said.
However, families were still finding ways to make it work for the next generation despite financial pressures. “I have a client who is putting up a minor dwelling and her 17-year-old daughter is already eyeing it up to live in when she goes to university,” she said.
Chambers said this could change the traditional pathway for young people leaving home. “They say things go in circles. Perhaps we are going to see that trend where kids stay at home longer, maybe supporting parents later on in life rather than them going into retirement villages.”
Bietje agreed: “This is the future. We are going to live in a community set-up going forward, where kids can’t afford to go out on their own and live in their own house, and grandparents can’t afford to retire and are moving back in with adult kids.”
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