The NSW government has lifted a six-year environmental ban on granny flats in areas surrounding the new Western Sydney International Airport, due to open in late 2026.
Under the changes, residents in Wollondilly, Fairfield, Camden, Liverpool and Penrith will be allowed to build secondary dwellings of up to 85 square metres within the airport’s lower noise zone. The homes must include double-glazed windows and insulation to minimise noise impact.
NSW Planning Minister Paul Scully said the reform could increase housing options for over 1,500 nearby residents.
“This allows people to have a granny flat to allow aging parents to move in, to allow the 20-somethings to have some separation out of the household, or just have somewhere you may be able to add to some housing supply in a sensible manner,” Mr Scully said.
The decision arrived as Australia grapples with a housing shortage and governments search for cost-effective solutions.
According to the Housing Industry Association, granny flats are becoming increasingly necessary, particularly in Sydney where land values and rental demand remain high.
Australia is falling short of national housing targets, with fewer than 166,000 homes approved in 2023 compared to the roughly 240,000 needed annually to meet the federal goal of 1.2 million new homes over five years.
Meanwhile, granny flat development has continued to grow across NSW, with an average of 4,320 approvals each year between 2017 and 2023, according to the HIA.
Granny flats appeal to homeowners because they can generate rental income without the cost and complexity of larger developments.
The approval process is also quicker and construction is less likely to face community opposition.
A 2023 report by Archistar, Blackfort and Cotality found 242,081 Sydney properties were suitable for granny flat development.
Camden resident Steve Ellevsen, who has been interested in building and renting out a granny flat as a source of secondary income, is thrilled by the policy reversal.
“The ban didn’t really seem logical to begin with,” Mr Ellevsen said.
“But the reform means I can start the long-awaited project and rent the flat out to people in need of housing. I have the means to contribute to housing supply and this way the setup is mutually beneficial.”
Several states have eased regulations around secondary dwellings in an effort to increase housing.
In 2022, Queensland allowed granny flats to be rented to non-household members, while in 2024 Western Australia removed planning approval requirements for granny flats up to 70 square metres.
Feature image: Adobe Stock.
