On a suburban Tasmanian block, the option of a ready-made backyard pod now sits alongside a planning change that could reshape what a second dwelling looks like. The arrival of bunnings granny flats on shop floors and in brochures arrives as the state moves to boost the allowable size of secondary dwellings from 60 square metres to 90 square metres.
How will Bunnings Granny Flats reshape size limits?
The state government is set to amend the planning scheme to increase the maximum floor space for secondary dwellings from 60 square metres to 90 square metres, a 50 percent rise. The current 60-square-metre cap generally allows only a one-bedroom layout; the extra allowance makes two-bedroom designs more feasible and changes the calculus for homeowners considering a backyard unit.
Prices for off-the-shelf backyard pods already on the market are low enough to draw attention: versions have been listed for as little as $26, 100 and $42, 900 for larger models. That affordability, combined with bigger permitted sizes, helps explain why the conversation has accelerated from novelty product to planning reform.
Why are planners expanding allowances from 60 to 90 square metres?
The planning adjustment is presented as a direct attempt to expand the supply of smaller homes. “We need to be coming at housing from all angles, ” Minister for Housing and Planning Kerry Vincent said, framing the size change as a straightforward way to increase housing options. “There is significant demand for one and two-bedroom homes across the state, and we need to make it easier to deliver this type of accommodation, ” Vincent added.
Vincent described small, self-contained dwellings on existing blocks as “low-hanging fruit” for growing medium-density housing stock. Secondary dwellings must remain on the same block as the main house and share access, parking and utility connections with the primary residence, reinforcing the policy’s focus on expanding homes without new land subdivision.
What are homeowners, experts and the state doing in response?
Property industry expert James Fitzgerald has argued that off-the-shelf backyard products have helped normalise backyard density, noting that more owners will look to make existing land work harder as affordability tightens. “In many markets, granny-flat style setups are already renting for around $400–$500 per week. That’s not theoretical upside. That’s real income, ” Fitzgerald wrote, pointing to rental returns as a practical motivator.
The move to larger secondary dwellings sits within a broader package of housing measures the government has signalled. The state has flagged a 5 percent levy on short-stay accommodation platforms from July 1, tripled the first home owner grant to $30, 000, and removed stamp duty on homes valued up to $750, 000. At the same time, the rental market pressure is evident: the state’s vacancy rate has been reported as low as 0. 3 percent, and Hobart recorded a vacancy rate of 0. 72 percent in January. Rents have risen significantly since 2020 and thousands remain on social housing waiting lists.
For homeowners, the combination of larger permitted sizes and ready-made pods offers a concrete pathway to add rental income or multigenerational space without subdividing land or taking on a second mortgage. For planners, it is a low-cost lever to increase medium-density stock quickly. For tenants and the broader market, it is a small but tangible expansion of housing supply.
The Tasmanian government presents the planning tweak as a targeted, practical change to widen options. “By expanding this size, we can create more diverse housing stock, giving Tasmanians greater options for where they can live, ” Vincent said.
Back on that Tasmanian block, the backyard pod remains a visible, inexpensive option. The planning change does not resolve the wider pressures on rents and social housing lists, but it reframes a backyard decision: a compact unit bought off the shelf may soon be large enough to house two bedrooms, two incomes, or a multigenerational household under the new rules. For some homeowners the choice is already clear; for others it is the start of a long conversation about how best to put existing land to work.
