The boom in the popularity of granny flats (secondary dwellings) is at least partly due to the strain of high property prices nationwide. Across Australia, granny flats, also known as secondary dwellings, are experiencing a remarkable rise in popularity and have been for quite some time..
These compact, self-contained dwellings are proving to be a smart solution for a range of modern housing challenges, from accommodating extended family to creating extra income through rental opportunities.
With changing lifestyle needs, rising property prices, and supportive regulations in many states, Australians are embracing granny flats as a way to maximize their property’s potential.
In this post, we’ll delve into why granny flats are boomingin Australia and what makes them a uniquely Australian phenomenon.
Table Of Contents
Benefits of a Granny Flat
Allowing friends or family to share one property, reducing costs.
Functioning as a tenanted investment to help cover a large mortgage or supplement income.
Keeping large families together.
Adding value to your property to boost capital gains.
Affordability
Best of all, adding a granny flat is far more affordable than buying an additional property. Cost estimates for designing and building a one-bedroom granny flat could cost less than $100,000, while a two-bedroom 60m2 completed "turn-key" unit should start at approx. $140,000.
Costs
Site conditions, location, quality of finishes & inclusions plus size of dwelling all affect the price. As a guide allow $2,400 per m2 when calculating likely costs for a granny flat. Pricing can vary wildly depending on many factors including (but not limited to) location, size, choice of materials & finsishes, availability of trades, Quality and experience of Builder, customization etc. "Specific" Granny Flat Builders are very competitive on Price. For a Custom Builder, this will cost more.
Quality of Finishes
$2,400m2 will get you a medium finish quality GF inclusive of vinyl or weatherboard cladding, tiled bathroom, water tank, laminated kitchen plus appliances, laminated flooring throughout, built in robes to both bedrooms, split system aircon etc.
Allow extra for landscaping and any patios / decks etc.
Popularity
Granny flats are most popular in NSW where over 6,000 were built last year, followed by Queensland with 2,365 and the remaining states with under 1,000 each.
Value Adding
A granny flat can boost your home value by up to 30 per cent.
The amount of value that a granny flat will add to your home varies depending on your property and the type of granny flat you wish to build. According to the 2019 CoreLogic/Archistart Granny Flat Report, it could boost home values by 30 per cent. This will vary dependeant on location and demand. Properties closer to main urban centres / cities attract higher rents.
Rental Yields
A granny flat can increase rental yields by upwards of 27%
When possible, one of the main benefits of owning a granny flat is the rental income you can generate. While it can be a handy room for the in-laws or children to stay in when needed, you can make a tidy profit by renting your granny flat out, significantly augmenting your rental yields.
Conclusion
The rise of the granny flat is reshaping the way Australians view home ownership, family living, and property investment. These versatile, self-contained dwellings have become more than just an architectural trend. They are a response to the evolving needs of modern society.
Whether you're accommodating aging parents, providing a stepping stone for young adults, or creating a passive income stream, granny flats offer a practical and cost-effective solution.
Their popularity underscores a broader shift toward sustainable, multi-functional housing that maximizes the potential of existing properties.
As councils continue to refine regulations and Australians become more innovative in their use of backyard spaces, the granny flat will undoubtedly remain a cornerstone of suburban design.
With the ability to blend flexibility, affordability, and lifestyle enhancement, granny flats symbolize the adaptability and resourcefulness that define the Australian way of life.
Now is the time to explore how a granny flat could enrich your property, enhance your lifestyle, and contribute to a more sustainable housing future.
The rise of the granny flat is here to stay. It's an exciting opportunity for homeowners to embrace.
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