At present one in five (18%) of Australia’s households hold two generations and some ten percent (9%) hold three generations. These figures are expected to rise to 24% and 13%, respectively, within the next decade.
Yet our analysis into this market segment has found that less than 5% of Australia’s existing housing stock successfully caters to this multi-generational market.
Recent analysis by CoreLogic has found that building a secondary self-contained home in the backyard can lift the overall properties value by up to 30% and adds around 27% to an investment properties previous rental income.
This work by CoreLogic also found that there were 583,000 properties in Sydney, Melbourne and Brisbane that met the criteria for an additional self-contained backyard dwelling.
Our work has found that the inclusion of a $185,000 Backyard Home (including development approval and infrastructure costs) – in the Brisbane context – can achieve gross rental yields of between 8% to 10% for permanent tenancies and between 15% and 20% for short-term occupancies.
Our work has also found that middle-ring detached homes with a fully-compliant and high quality one-bedroom secondary residence – like Backyard Home – resell for between 12% and 15% more than other dwellings in the same location without a secondary abode.
The demand for backyard housing solutions is high and rising.
And the supply of housing that caters well for multi-generational and other household members is in short supply.