Rising Property Prices Drive Multi-Generational Home Renovations in Australia

As property prices in Australia continue to soar, increasingly more families are turning to multi-generational living arrangements as a viable solution to the housing crisis. A recent surge in home renovations aimed at accommodating multiple generations has been observed, particularly in urban areas where the cost of living has made traditional home ownership challenging for many.

In Sydney's affluent Lane Cove suburb, Georgia Booth and her partner Adam Farrow-Palmer exemplify this trend. The couple built a three-bedroom home atop her in-laws' residence for approximately $900,000, a significant saving compared to Sydney's median house price of $1.2 million at the time of their purchase. "The mutual benefit of having family support while raising future children, combined with providing assistance to Adam's parents, made this arrangement appealing," Booth noted. As of 2025, Lane Cove's median house price has further escalated to $3.2 million, underscoring the escalating housing market pressures.

According to Dr. Sarah Johnson, a Professor of Urban Planning at the University of Sydney, the rising costs of housing have led to a paradigm shift in living arrangements. "The phenomenon of multi-generational living is not merely a trend; it reflects a necessary adaptation to economic realities. Families are leveraging existing assets to create affordable housing solutions," she stated in her 2023 study published in the Journal of Urban Economics.

Architect Harry Catterns, co-founder of SAHA architecture studio, has encountered a growing interest in multi-generational projects. "We have seen a substantial increase in inquiries from families looking to optimize their living situations. The concept of sharing space has evolved into an opportunity for enhanced community living and environmental sustainability," he remarked. Catterns has completed several such projects, which not only address housing shortages but also promote social connectivity among residents.

The renovations are not without their challenges. Booth recalls the initial trepidation regarding the potential complexities of living closely with extended family. "We had numerous discussions about privacy and boundaries, but ultimately, the experience has been overwhelmingly positive. Family dynamics have flourished, and our children benefit from close relationships with their grandparents," she explained.

Nola Young from Melbourne has also embraced this concept by converting a garage into a home for her son and his family. "With housing prices soaring, my son was struggling to save for a deposit. The new granny flat laws in Victoria allowed us to convert our garage into a livable space for him and his family, providing them with stability during tough economic times," she shared. The conversion cost around $120,000 and was driven by the desire to support her family rather than waiting to provide assistance through inheritance.

On a broader scale, Michael Fotheringham, Managing Director of the Australian Housing and Urban Research Institute, emphasizes the importance of policy shifts to facilitate multi-generational living. "The concept of the 'missing middle'—medium-density housing solutions—must be embraced to alleviate the housing crisis. We need to consider diverse strategies that enhance our urban environments," he stated during a recent housing forum.

Despite the benefits, the approval process for such renovations can be cumbersome due to local regulations and community concerns. Catterns pointed out that many residents fear that additional dwellings will lead to transient rentals, such as Airbnb, that could disrupt neighborhood dynamics. "Community engagement and education about the benefits of multi-generational living are essential to overcome these fears," he added.

As families navigate the complexities of modern housing challenges, the trend towards multi-generational living appears to be not only a response to economic pressures but also a meaningful way to foster familial bonds. The future of housing in Australia may very well hinge on embracing innovative living arrangements that prioritize community, sustainability, and intergenerational support. As this trend gains momentum, it is essential to explore the potential policy adjustments that could further encourage such developments across the nation.