New legislation allowing Kiwis to build granny flats of up to 70 square metres without a building consent marks a significant win for both homeowners and renters, opening more affordable living options amid a stabilising property market.
The Building and Construction (Small Standalone Dwellings) Bill simplifies the process for building small, code-compliant dwellings. While the structures must still meet the Building Code, involve licensed professionals, and be notified to councils, the need for a full building consent will be removed. Resource consents will also no longer be required under updated National Direction through the Resource Management Act, although councils may still apply development contributions for infrastructure.
“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.
“From today, granny flats of up to 70 square metres can proceed without a full consent process. It’s a practical way for homeowners to support extended families, such as grandparents, young adults or those with disabilities, right on their own properties.”
With affordability challenges continuing to shape housing choices, multigenerational living is being considered by more Kiwi families. An LJ Hooker survey found that around a quarter of respondents would be willing to live with their in-laws, while 60% said they would prefer self-contained accommodation for extended family, something this new legislation makes easier to achieve.
“Family dynamics have changed a lot in recent years,” Tiller said.
“It’s becoming more common for adult children to live at home longer, or for older parents to move closer to family support. These decisions are often driven by cost, but they can also help younger Kiwis save for a deposit and get onto the property ladder faster. For older relatives, it allows families to provide support and care while maintaining independence.”
The policy comes as New Zealand’s housing market shows stabilisation, creating the foundation for growth. According to Cotality NZ’s Home Value Index (HVI), national dwelling values fell 0.2% in December, following a similarly small decline in November. Over the full year, values ended 2025 around 1% lower nationally, reinforcing the view that the market has remained largely in a holding pattern rather than entering a strong recovery phase.
“For property owners, fewer barriers mean new opportunities to enhance value,” Tiller said.
“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.”
Renters are also set to benefit from an increase in smaller, more affordable housing options. Cotality data shows national rents fell 1.1% between June and August, with rental listings still about 12% above 2023 lows but tightening again in recent months.
“These dwellings add much-needed supply in established suburbs, ideal for singles, couples, and key workers,” Tiller said.
“In areas with strong demand and good transport links, we expect this change to ease pressure at the affordable end of the rental market, particularly as overall rents remain flat and affordability challenges persist.”
As New Zealand continues to address its housing shortfall, this consent-free policy provides a practical, low-barrier solution for both property owners and renters. Homeowners interested in exploring how a granny flat could add value to their property can contact their local LJ Hooker office for guidance.