A Garden Studios granny flat set by a backyard pool shows the kind that have been popular among families looking to give adult children independence.

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Victorian first-home buyers, divorcees and victims of domestic violence are turning to granny flats and relocatable homes as a way out of the state’s housing crisis.

Providers across Melbourne and even from interstate have recorded rising inquiry and sales as affordability drives a growing number of Millennials to find creative solutions.

In December last year the Victorian government removed the need for a planning permit to add a small second residences, up to 60sq m in size.

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Six months on, Ironbark Cabins director Gerard Nisbet said while retirees were still on top, youngsters looking at a mini home were gaining.

“We do have quite a few first-home buyers who can’t afford a real house,” Mr Nisbet said.

“There’s definitely been an increase in people who don’t have the stretch in their budget for a traditional first home.”

However, he noted many were finding that tougher lending criteria for such homes meant banks would not back them in — without help from the bank of mum and dad.

Peach Dale (left) is looking forward to her “tiny” home for Chewton.

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The Ironbark Cabins tiny home is under construction in a warehouse.

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Peach Dale had spent 20 years renting around Melbourne and figured she would never own her own home, but after recently locking in a lender and buying a 400sq m block of land in regional Chewton, she is expecting to move into a 42sq m tiny home by September.

With her landscape design and architect father already planning a native garden for the block, she’s looking forward to giving her dog Gypsy more space to run around in than the one-bedroom apartments she’s spent the past five years living in.

“She’s going to be very excited,” Ms Dale said.

The whole package will cost her almost $100,000 less than the $487,000 typical cost of building a new house in Melbourne today — not including the land.

A Garden Studios small residence showing living areas.

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Garden Studios director Joseph Cade said his business had doubled since the Victorian government announced the plan to make adding second homes to properties easier in September last year.

While most of those proceeding at the moment were paying for their build without any lending, he said it was possible to get a 10sq m space with room for a shower and a bed for under $53,000.

Tattinger Chapman had a two-bedroom studio with a kitchen and bathroom added to her East Bentleigh backyard for her daughters and said it had given them independence, but kept them close to home.

“When I was in my 20s and 30s you didn’t see much of it, but parents should give it consideration — things are changing,” Ms Chapman said.

“It’s better than your kids spending $600 a week on a property and then getting kicked out in 12 months.”

Another Garden Studios design shows an alternative design option.

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Other buyers spoken to by the Herald Sun revealed they were turning to granny flats as a way to rehouse themselves after a divorce. Some regional property owners have even added them to help young women escape from domestic violence.

Real Estate Institute of Victoria president Jacob Caine said there was no question the backyard installations add value to a property and it was the kind of creative solution the state needed more of.

“Given the affordability environment that first-home buyers find themselves in at the moment, creativity is essential,” Mr Caine said.

Even NSW-based VanHomes, which produces expandable relocatable homes that are classified as caravans but designed as long-term housing, has reported a surge in demand in Victoria.

Founder Vito Russo said with the builds expanding to 59sq m, below the state’s size cap, demand from Melbourne and regional areas had “increased dramatically” from two or three a month to 10-15 and could catch up to the 50 a month typically ordered in NSW.

Homes can also be elevated to create deck areas if desired.

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Living spaces and kitchens can look similar to those in more traditional residences.

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“It was once older folks moving to downsize into their kids’ backyards, but in the last while we have seen an increase of the younger generations,” Mr Russo said.

“We’re seeing people who can’t find a home to rent. So Millennials are definitely an increasing market … in the next five years we think it could be 50-50 with downsizers.”

He added that with the firm’s 59sq m expander home priced at $140,000 they were encountering couples taking out personal loans of $70,000 each to get a home quickly.

Resales have typically been at about 90 per cent of the relocatable homes’ original value, so long as they have been well maintained, he added.

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