Kaylee Cranley
Updated 22 Apr 2026, 4:01am
First published 22 Apr 2026, 4:00am
A surge in studio and granny flat dwellings across the Southern Highlands reveals how families are unlocking affordability in the premium tree-change market.
With median house prices upwards of $1m in the region – including Bowral, with a median of $1.51m and Mittagong, with a median of $1.12m – homeowners are opting for secondary dwellings largely driven declining housing affordability.
Agents in the region are reporting a greater number of studio and granny flats appearing on the market as the option to include the secondary spaces in homes rises in popularity.
“We probably see maybe two in 10 properties might have a studio or granny flat or secondary accommodation, which is a significant increase on say 10 years ago,” said Ben Olofsen, Property Partner at The Agency.
58 Railway Parade, Mittagong is currently listed guiding $1,39m with a studio on the property
58 Railway Parade, Mittagong studio
“It’s opening doors to a lot of people who may not have otherwise been able to afford to buy in the area.”
According to Mr Olofsen, many homeowners opt for a studio or granny flat for a number or reasons from opportunity to generate a secondary income to housing relatives.
“We’re seeing a lot more homeowners putting granny flats on their properties for a number of reasons, to house extended family, to get supplementary income, whether it be Airbnb or permanent rental as well,” he said.
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8 Old Wingello Road, Bundanoon studio recently sold for $1.23m
“That secondary income stream can make a big difference between being able to afford the property or not.
“We’re seeing a massive increase in that in the Southern Highlands.
“A studio obviously can be used for a range of applications, whether be an artist or an office space or whatever it may be but we’re seeing a good mix of both.”
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116 Wilson Drive, Hill Top with studio is currently listed with a price guide of $975,000
Mr Olofsen said with the Southern Highlands being an hour and a half from Sydney with good transport options back to city, this has become a very affordable option for people wanting to relocate.
“Having secondary accommodation, whether it be for the extended family or whether it be to get a second income stream, just makes it even more affordable for people coming out of Sydney,” he said.
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