New granny flat rules could reshape property values and living conditions
Thursday, 15 January 2026
New Zealanders have been warming to the idea of living with extended family — as long as everyone has their own space — and the new consent-free granny flats could be what they are looking for.
An LJ Hooker survey last year found there was a growing acceptance of extended family living arrangements, provided privacy was maintained, with 27% okay with living together but, of those, 60% wanted their own space.
“This change empowers property owners with sufficient land to add flexible, modern living spaces for family, guests or rental income without unnecessary hurdles,” LJ Hooker Head of Research Mathew Tiller said.
Homeowners can now build small standalone dwellings of up to 70sqm without needing a full building consent, under the Building and Construction (Small Standalone Dwellings) Bill.
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While councils still need to be notified and the dwellings must still meet the Building Code and be built by licensed professionals, the streamlined rules remove one of the biggest barriers to adding extra housing on existing properties.
The survey respondents said they would be willing to live with their in-laws, while over half said they would prefer extended family members to live in separate, self-contained accommodation on the same property.
Tiller said the findings highlighted how attitudes to housing were shifting as affordability pressures persisted.
“People are open to multi-generational living, but they don’t necessarily want to be living on top of each other,” Tiller said. “Having a separate, self-contained space makes those arrangements far more practical and appealing.”
He said the new rules made it easier for families to support adult children, ageing parents or relatives with disabilities, while preserving independence for everyone involved.
“Family dynamics have changed a lot in recent years. Adult children are staying at home longer, and older parents are often moving closer to family support,” Tiller said.
Cost was a big driver and there were longer-term benefits such as helping younger people save for a deposit or allowing older relatives to age in place with dignity.
The legislation also removed the need for resource consent under updated national direction through the Resource Management Act, although councils could still apply development contributions to cover infrastructure costs.
The policy change comes as the housing market remains relatively flat. According to Cotality NZ’s Home Value Index, national dwelling values dipped 0.2% in December, ending 2025 around 1% lower overall.
Tiller said the timing could encourage more homeowners to consider adding secondary dwellings as mortgage rates eased and housing supply remained tight.
“Fewer barriers mean more flexibility for property owners,” he said.
For property owners, secondary dwellings could also enhance value.
“Sites that can accommodate a compliant secondary dwelling could see improved saleability and a small value lift. While the national impact will be gradual, the timing aligns well with lower mortgage rates and tightening listing volumes, down around 12% from 2024. Together, these factors are likely to support moderate value growth of up to 5% through 2026.”
Tiller expected the national impact to be gradual, but said properties that could accommodate a granny flat may become more attractive, particularly in areas with strong rental demand and good transport links.
The additional supply could help relieve pressure at the more affordable end of the rental market, he said, where rents had remained largely flat despite ongoing affordability challenges.