Melbourne’s housing landscape is changing fast. Many homeowners are rethinking their land use due to rising property prices, lifestyle demands, and the push for smarter design. Whether you want more space for family, an extra income stream, or to future-proof your property, secondary dwellings are becoming increasingly popular.
Tiny Homes: Small in Size, Big on Impact
The tiny home trend has gained serious momentum in recent years, and it’s easy to see why. These compact, cleverly designed dwellings are all about making the most of less: less space, less waste, and often less cost.
Tiny homes usually range between 15 and 40 square metres, but smart layouts make them feel more spacious than expected. They can work as a guest suite, rental studio, or personal retreat. Flexible, stylish, and affordable, they are also eco-friendly, appealing to those who want a lighter environmental footprint.
Granny Flats: A Time-Tested Favourite
Granny flats have been a staple in Australian backyards for decades, offering self-contained dwellings that comfortably fit one or two people. Perfect for ageing parents, adult children, or long-term tenants, they provide privacy, practicality, and strong resale value.
Typically larger than tiny homes, granny flats include a kitchen, bathroom, living area, and one or two bedrooms. They cost more to build, usually between $100,000 and $200,000, but can significantly boost property value and rental income. Recent planning updates across Melbourne councils have made it easier to add one to your property.
Design and Comfort: What Suits Your Space?
The right choice depends on your lifestyle and vision. Granny flats mimic traditional home layouts, making them ideal for long-term living.
Tiny homes, on the other hand, are design-driven and often more innovative. Lifestyle cabins, a modern take on tiny homes, combine style with practical features such as open-plan living, smart storage, and large windows. These are excellent for creative studios, wellness retreats, or work-from-home spaces.
Costs and Construction: What You’ll Spend and Save
Granny flats require higher upfront investment due to their size and compliance requirements. Plumbing, foundations, and building approvals can add to the overall cost.
Tiny homes in Melbourne are more cost-effective and quicker to install, especially modular or pre-designed models. Some are even transportable, offering added flexibility.
For those wanting more space without committing to a full dwelling, duplex cabins offer two connected living areas under one roof, ideal for short-term rentals or multigenerational families.
Rental Potential and ROI
Both options provide strong rental opportunities. Granny flats attract long-term tenants, ensuring steady rent and lower vacancy.
Tiny homes shine in short-term rental markets like Airbnb, offering unique charm and flexibility. They can easily be repurposed into a home office, teenage retreat, or holiday escape if your needs change.
Which One Adds More Value?
When it comes to property resale, granny flats usually win. Their permanence, size, and self-contained layout make them a valuable selling point.
Tiny homes offer value in other ways: affordability, fast setup, and lifestyle flexibility. While they may not boost resale as much as granny flats, they greatly enhance liveability and function.
Think Long-Term, Live Smarter
Whether you choose a granny flat, a creative tiny home, or a duplex cabin, adding a secondary dwelling is a smart move in today’s market. It’s not only about financial return but also about creating a space that improves the way you live.
Before building, consider your long-term goals, budget, and available space. Always seek professional advice on Melbourne’s building codes and local council requirements.
Let’s Bring Your Vision to Life
Still deciding? Whether you want a self-contained granny flat, a modern tiny home, or a stylish lifestyle cabin, 1800 Cabins can help.
Our team specialises in creating functional, attractive, and affordable spaces designed to suit your property and lifestyle. We also offer duplex cabins for ultimate flexibility.
📞 Call 1800 470 343 today to speak with our experts and explore the possibilities for your backyard.