The great Australian dream has backfired spectacularly, forcing multiple generations under one roof as home prices soar beyond the reach of single incomes.
New PropTrack data reveals searches for “dual-occupancy” homes have skyrocketed 385 per cent in the past year, while “dual-living” is up 100 per cent and “granny flat” interest has jumped 30 per cent — with demand exploding across Australia’s outer suburbs.
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This home at 89 Summerhill Rd, Footscray, comes with a self-contained granny flat.
This five-bedroom property comprising two self-contained residences at 42 Therese St, Marsden, in Greater Brisbane, is for sale for $1.19m – $1.26m.
The shift is becoming increasingly visible in areas like Ipswich and Logan in Queensland, Western Sydney, Western Melbourne, and Launceston, where affordability pressures and larger lot sizes are driving uptake, according to separate research from PRD.
That analysis found 10 to 15 per cent of households across the country are living with family members under the same roof, but that is tipped to blow out to 33 per cent by 2041.
PRD Real Estate chief economist Diaswati Mardiasmo said multi-generational living had historically been more common among migrant communities, but was now being adopted by a broader cross-section of families — particularly those under financial pressure.
Multi-generational living is becoming more common in the Western Sydney area. Photo: Brook Mitchell.
“Now, we are seeing multi-generational living becoming more integrated as a life choice within the general population — increasingly more so in metropolitan areas,” Dr Mardiasmo said.
“The reason behind multi-generational living remains the same over time — housing affordability, cost of living, caregiving — but in many cases, it has now transitioned from a nice option to have to ‘well, this is the only way we can make it work’.
“In short, for many, multi-generational living is now no longer an option or preference, but a necessity.”
Dr Mardiasmo said housing affordability pressures, migration, and shrinking public housing availability were the main contributors.
“There is now also an increasing emphasis on work-life balance, family connection, building quality time, self-care and mental health, preserving culture and mother-tongue languages, and sharing the workload,” she said. “Multi-generational living allows for this.”
PRD chief economist Dr Diaswati Mardiasmo.
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Switchboard Finance founder Nick Lim said he had also noticed multi-generational living had shifted from being a cultural preference to a financial strategy.
“Five years ago, a family pooling households was usually a lifestyle decision,” Mr Lim said. “Now it’s increasingly a mortgage serviceability decision. One income can’t carry a Brisbane home at current prices, but two or three can, and lenders are starting to assess those structures properly, where they used to penalise them.”
The data seems to back it up, with around one in five households nationally now multi-generational, according to the latest Bureau of Statistics figures.
Mr Lim said the situation was becoming more common for self-employed borrowers.
“A cafe owner or tradie running their own business often can’t qualify for a home loan on their own because of how banks assess variable income,” he said.
Launceston is becoming a place with an increasing number of multi-generational households. Pictures: Supplied
“When they combine with an adult child in PAYG employment, or with retired parents who own their existing home outright, the serviceability picture changes completely. The property becomes a vehicle for solving several problems at once.”
He said the pattern was particularly evident in areas where home prices had risen substantially faster than local incomes.
“Younger buyers who would have bought solo five years ago are now structuring purchases with parents or siblings as co-borrowers,” he said.
“We’re seeing more enquiries specifically about properties with dual living features like separate entries, granny flat potential, or split layouts, because families want the financial benefit of shared ownership without losing privacy.”
This property in Newport comprises two separate homes cleverly joined together to accommodate multi-generational living arrangements. Image supplied.
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Two Red Shoes mortgage broker Rebecca Jarrett-Dalton said she was seeing a “sharp rise” in multi-generational living and shared ownership scenarios.
“New property designs are being developed with future multigenerational living in mind, incorporating features like pre-planned connecting doors and attached granny flats,” Ms Jarrett-Dalton said.
“Furthermore, new, innovative models are emerging in regional areas aimed at older community members, where they contribute a lump sum and receive a share of the capital gain upon exit.”
Dr Mardiasmo said where and how Australians lived was a key factor driving the trend.
“There is a concentration in areas that allow for such a living arrangement; usually places that have bigger blocks of land and/or housing topography, which tends to be in the outer areas,” she said.
“That said, there is an evolvement in the housing topography for multigenerational living. Families are finding different ways to do this based on the limitations of where they are living and what is possible.”
This eight-bedroom property at 20 & 20A Agrafe Place, Minchinbury, is designed for multi-generational living.
Traditional granny flats are also evolving into fully self-contained “granny pods” and dual-living designs, with separate entries, private zones and independent facilities increasingly being built in from the outset rather than added later.
“We are also seeing an increase in the number of dual duplexes being built, houses with separate entry, and granny flats on the same land site — with local and state governments releasing policies that supports this; as well as renovations where a separate entry is created,” Dr Mardiasmo said. “So, in a way, the supply side is also listening to this demographic change.”
Despite this, multi-generational living remains heavily tied to detached housing, with 89 per cent of such households in standalone homes — underscoring the limitations of apartments and medium-density housing in accommodating extended families.
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