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Modular granny flats and the rise of multi-generational living
| Multi-generational households, 2021 Census (as reported) | 335,000, up from 275,000 — a 22% increase[1] |
|---|---|
| Households with two or more families, 2021 Census | Under 2% — the direct ABS figure, a narrower measure than 'multi-generational'[2] |
| People living in a multi-generational household | About one in five, per ABC News[1] |
| 20-year projection from coordinated modular uptake | Up to 192,000 additional homes — private-sector modelling by Hartigan and Associates, not a government forecast[1] |
| Driver most often cited | Cost-of-living pressure, alongside care for ageing parents and adult children unable to buy[1] |
ABC News reported in August 2026 that Australia had 335,000 multi-generational households at the 2021 Census, up from 275,000, a 22% increase, and that about one in five people live in one.[1] The direct ABS figure is narrower: fewer than 2% of households contained two or more families in the 2021 Census.[2] Private-sector modelling reported by ABC projects up to 192,000 additional homes over 20 years from coordinated modular uptake; it is not a government forecast.[1]
Modular and prefabricated builders are increasingly being asked for something other than a first home or a downsizer: a second, self-contained dwelling on an existing block, built quickly enough to house a family member who needs somewhere to live now. ABC News reported on this shift on 30 August 2026, framing it as a direct response to housing costs rather than a lifestyle preference[1].
Why this is suddenly a live topic §
Demographer Simon Kuestenmacher, co-founder of The Demographics Group, told ABC News that "cost-of-living pressures have increased so starkly" that households are reorganising around shared housing rather than each generation buying separately[1]. Hugh Hartigan, a former Treasury official and former head of research at Housing Australia, now principal of Hartigan and Associates, framed the constraint as one of demand rather than construction capacity: "the main issue is really demand... people don't necessarily trust" the modular option yet, he told ABC News[1].
What the census numbers actually say — and don't §
ABC News reported that the number of multi-generational households rose from 275,000 to 335,000 in the 2021 Census, a 22% increase, and that about one in five people in Australia now live in a multi-generational household[1]. Worth flagging: the Australian Bureau of Statistics' own dedicated "multigenerational household composition" variable is new for the 2026 Census, not the 2021 one[3] — so the 2021-based figures above are best read as reported by ABC News rather than as an established, ongoing ABS series. A figure that is directly and unambiguously sourced to the ABS 2021 Census is narrower: fewer than 2% of Australian households contained two or more families that year[2]. The gap between that figure and the "one in five" statistic reflects a difference in definition — a household with, say, a grown child or a parent living under the same roof as a couple with kids is "multi-generational" without necessarily counting as a separate "family" in ABS terms.
Why modular fits this particular need §
The appeal for households in this position is speed and self-containment: a modular secondary dwelling can be manufactured off-site while approvals are in progress, then installed in days rather than months, without displacing the household from the existing home during construction — see how long a modular home takes for the general build-time comparison. Hartigan and Associates modelled that, with coordinated industry and government action, modular construction could deliver up to 192,000 additional homes over the next 20 years, rising to an estimated 20,000–25,000 additional homes a year by year twenty[1]. This is a private consultancy's own modelling of a coordinated-action scenario, not an official government projection or a currently funded program, and should be read as such.
The design questions this raises §
A secondary dwelling built for an ageing parent or an adult child has different priorities from one built purely as a rental. Recurring themes in this space include a separate, step-free entrance so the arrangement doesn't feel like moving back into someone else's house; some degree of independent living space — even where a full second kitchen isn't permitted — so the arrangement can function like separate households sharing a block rather than one enlarged household; and proximity to the main dwelling for support without full integration. Exactly what is permitted — floor area, whether a second kitchen is allowed, setback and site coverage rules — varies by state and is covered in granny flat rules by state rather than repeated here, since those limits change independently of the demand trend described on this page.
What this page does not cover §
This page does not cover state-by-state size and approval limits (see granny flat rules by state), financing a secondary dwelling (see granny flat finance), or the disability and aged-care housing angle, which is covered separately in NDIS, SDA housing and modular construction.
Related guides §
- Granny flat rules by state
- Granny flat layout and design
- Granny flat vs tiny home
- How long does a modular home take
- NDIS, SDA housing and modular construction
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References §
- ABC News — 'Modular solution for multi-generational living as housing crisis changes way we live', 30 August 2026 — the household figures, expert quotes and modelling projections cited on this page all trace back to this report. abc.net.au/news/2026-08-30/modular-prefabricated-housing-for-multi-generational-living/107007838
- Australian Institute of Family Studies, citing the ABS 2021 Census — 'Population, households and families' — states that fewer than 2% of households contained two or more families in the 2021 Census, a directly ABS-sourced figure. aifs.gov.au/all-research/facts-and-figures/population-households-and-families
- Australian Bureau of Statistics — Census dictionary entry for 'Multigenerational household composition (MHCD)', confirming this is a new variable introduced for the 2026 Census. abs.gov.au/census/guide-census-data/census-dictionary/2026/variables-topic/household-and-families/multigenerational-household-composition-mhcd
Figures are as published by the sources above at their respective dates and are paraphrased summaries, not verbatim reproductions. Verify current pricing and rules directly with builders, lenders and planning authorities.