She started work on her first book, Obernewtyn - which later grew into a six-volume series - when she was only 14; the protagonist, Elspeth Gordie, is based on Carmody's own tough childhood as the eldest of eight children and a misfit at school.
Now 53, the Australian has written 26 critically acclaimed fantasy, science fiction and short stories, and is working on a further three. Her books have won many awards, including Australia's renowned Children's Literature Peace Prize.
Last month she was in Hong Kong to meet students at Kellett School and discuss her work.
After completing a degree in literature and philosophy, Carmody started work as a journalist - hoping that facts could "help [her] figure the world out". Journalism taught her discipline and how to think critically, but she says she felt closer to the truth when at home writing fiction.
"Being a journalist, the realisations are more about other people and less about my relationship with the world. Fantasy allows me to explore metaphysical states, emotional states, far more."
Carmody uses her books rather like sponges - soaking up ideas and experiences around her for her plots. She often poses burning questions that she yearns to answer: why are some people cruel and others courageous? What makes a person sacrifice themselves for others?
She often touches on serious topics, using her characters' outer journey to reflect their inner "roller-coaster" ride. "I choose [to write] something that is deep for me, something you don't know all the answers to," Carmody says. "I choose mystery over knowledge."
In the young-adult novel, Greylands, she discusses how grief paints everything a gloomy grey. The story idea came to her she coped with the death of both her father and brother; she remembers the strange feeling of watching other people laughing and going on with their lives as normal as her own world, full of sadness at the time, seemed to be grinding to a halt.
She also reflects on incidents when children find their parents have tried to hide the truth about the death of their baby brother or sister, or pet dog. "For kids, [death] is such a strange absence," Carmody says. "Are we right to not tell the children - supposedly to protect them? What is it like for children to deal with adult grief?"
Thirty-nine years into her writing career, she no longer feels she has to sit for 12hours at a time without a break in order to write her stories. Instead she increasingly uses her own life for inspiration.
Carmody divides her time between two homes - one along Great Ocean Road, a 243km stretch of coast in Victoria, southern Australia, and the other in Prague in the Czech Republic; living abroad, where she doesn't speak the language, made her feel out of the place - like a refugee.
It inspired her latest book, The Red Wind, which looks at people leaving their old lives behind and what forces such a decision.
"It's a terrifying and brave thing," she says. "My switching homes and travelling made me wonder what it is like to live in a place where you don't belong. Do we ever belong anywhere?"