Sometimes it’s just time to start again new on a property. Video by Alistair Walsh and Christina Zhou.
Construction in NSW is reaching new records and more of it is happening in people’s backyards, as they build on their own land in response to a tight housing market.
About 75 per cent more people are building on their blocks of land, as subdivisions or granny flats, than five years ago, according to government statistics released today.
The new statistics show that the increase occurs alongside a boom in construction generally. The value of construction in the state rose last financial year to $34 billion from $29 billion a year earlier.
Peter Phibbs a professor of Urban Planning and Policy at Sydney University subdivisions on larger blocks could become a substantial source of housing supply as Sydney residents seek to make use of wealth tied up in their land.
“People are trying to use their lots to turn one into two, it’s their superannuation for later life, or a start for their kids in the housing markets,” said Professor Phibbs. “I can see a growth model: gentrification on bigger lots and more dual occupancy. Sydney could easily achieve its [housing] targets [that way]”.
About 4500 subdivision certificates were issued in the last financial year, a growth of about 10 per cent on the previous financial year.
Professor Phibbs said that subdividing would appeal to people in Sydney’s middle suburbs on larger blocks and those looking for an option between apartment living and a detached home.
Granny flat approvals have also surged. About 3650 flats were approved last year, a growth of about 20 per cent.
That may reflect the number of young people staying in their parents’ homes. The number of people under-25 moving out has fallen about 20 per cent in the past five years, data from the ABS has shown.
“It makes sense that a way of dealing with that would be to have a separate dwelling on the property with a separate entrance,” said UNSW Professor Lyn Craig. “Perhaps ‘granny flats’ are something of a misnomer.”
Val and Paul Buckley have joined the trend after purchasing a granny flat so that they may live on their daughters’ property.
“It’s cheaper than moving into an aged-care residence, and this way we are close to family,” Mrs Buckley said.
Robert Bird, a licensed builder for High Tech, the company that built the Buckley’s flat has said there are three categories of granny flat investors.
“It essentially boils down to three groups: parents building for kids, kids building for parents, and pure investment properties,” Mr Bird said.
These investment properties are an expanding market.
Rich Harvey, a buyer’s agent and real estate writer, said that investors can still reap rental returns of six per cent on granny flats, which are relatively cheap to construct. He agreed that the growth of short-term rental websites such as Air B’n’B may be prompting growth in their construction.
The state government recently released a discussion paper that canvassed encouraging greater use of medium-density homes, such as terraces, dual occupancies and town houses.
Chris Johnson, from the Urban Taskforce, a lobby that represents property developers, disputed whether sub-divisions alone could ever make a serious contribution to housing supply.
Sydney needs about 500,000 new dwellings by 2030, according to the state government’s metropolitan strategy.
Planning Minister Rob Stokes said the growth in construction activity reflected reforms to the planning system.
“We set out to make the planning system simpler and easier to use, so people can build and renovate their homes without getting stuck in a web of complex planning regulations,” he said.