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HIA Tasmania Executive Director Benjamin Price said granny flats are one of the quickest and most sensible ways to boost housing supply, particularly in established suburbs close to jobs, schools and services.
“Bigger granny flats mean bigger choice, and lifting the size limit helps get unnecessary regulation out of the way of sensible housing options,” Mr Price said.
“This change gives homeowners and builders the flexibility to build a genuinely usable second home that meets real market demand.”
Mr Price said the national experience showed exactly what happens when planning barriers are removed.
“Nationally, granny flat construction has surged, with HIA analysis showing members expect to build around ten times more granny flats this year than they did in 2022,” he said.
“Too often pointless red tape gets in the way of sensible housing choices, and this change clears a path for more homes to actually get built.
“With land supply constrained and construction capacity under pressure, we need to make better use of the land we already have. Granny flats do exactly that.”
Mr Price said increasing size limits made granny flats far more practical for renters, downsizers and multigenerational families, while also supporting local builders and tradies.
“Larger granny flats mean more choice for families, more rental supply, and more work flowing through the residential building sector,” he said.
“If we’re serious about housing supply, then freeing up infill opportunities is simply common sense.”
Mr Price said Tasmania was now well placed compared to other states.
“At 90 square metres, this puts Tasmania at the very top end nationally for granny flat size, giving families and builders flexibility you simply don’t see in most other states.”
HIA said granny flats should be treated as a core part of the housing solution and called on governments to continue removing barriers that slow small scale, shovel ready projects.
“The fastest way to deliver more homes is to let people build them where infrastructure already exists,” Mr Price said.
“Granny flats are a practical, low impact way to do exactly that.”
The Victorian Government's Working from Home Bill has become available, and proposed buyer protection laws have undergone some changes.
On 15 January 2026, penalties for non-compliance were increased under the Building Work Contractors Act 1995, Fair Trading Act 1987, and the Plumbers, Gas Fitters and Electricians Act 1995. The reforms also introduced new offences including undertaking, or engaging others to undertake, unlicensed work.
HIA advocates for a more transparent, efficient and accountable Australian Standards system. This policy outlines HIA's recommendations for improving the development and enforcement of Australian Standards, and the role of the Australian Building Codes Board in assessing the impact of standards referenced in the National Construction Code.
“Australia needed to build more than 250,000 homes last year just to keep pace with demand growth and begin reducing the housing shortage and yet we commenced less than 200,000 homes. This is why home prices and rents are rising,” stated Tim Reardon, HIA’s Chief Economist.