How Much A Granny Flat Costs
From $24k to $240k – your granny flat buying power.
The cost of a granny flat varies hugely depending on what purpose you’re building it for and the quality you’re after. The purpose of the granny flat will inevitably impact the size and quality you need, which will dramatically impact the cost you can expect to pay.
A few additional cost restrictions to keep in mind if you’re considering building a new granny flat include:
- Some councils charge a "contribution fee” (up to $20,000) for granny flats – check with yours before you begin so you don’t get any nasty surprises
- In Victoria, only a person dependant on the occupier of the main house can live in a granny flat and you will not be able to use the flat as an investment property
- All granny flats must comply with Australian building standards
- Granny flats must have everything needed for independent living, including bathrooms, kitchens and private access
- Only one granny flat is allowed on a single residential property
Attached vs. detached granny flats
You’re probably aware that there are two types of granny flat: freestanding or an extension of the existing home.
Attached granny flats tend to suit larger homes, or people who do not want to sacrifice much garden space. These offer the flexibility to expand your existing house, while retaining the option to rent it out as a separate home.
There is a perception that an attached granny flat is cheaper because you can build it into the existing structure, but this isn’t necessarily the case. Attached granny flat often require you to reinforce your existing house structure to facilitate them – this can add significant costs. Detached granny flats don’t require this and have the added benefit of being more easily relocated in the future if required, which can save on money down the line.
Ultimately, the purpose of the granny flat is what will determine which option pays off in the long run.
Flatpack granny flats: the pros and cons
Flatpack designs can be great if you’re after a basic solution. A modular design can be expected to take only around eight to 12-weeks to install making it quite a time efficient option.
If you have the DIY know-how, some companies, such as iBuild, ship flat pack granny flats from China for as little as $24k. Be warned, your final budget can skyrocket once you consider the additional costs of labour, landscaping, electricity and plumbing.
That’s not to say that all kit homes are money-pits. There have been amazing advancements in modular and prefab designs in Australia recently and you can buy good quality flatpacks for relatively cheap prices. An Australian design starts at around $70k for a basic one-bedroom granny flat. While the upfront cost is more expensive, this can be more cost-effective ultimately as most Australian companies also perform the installation on your behalf.
The key to successfully installing a modular granny flat is to research, research, research. Make sure that there are no hidden fees in the costs quoted to you, and that the design you’re selecting will add value to your home and maximise the space you have.
Is a custom designed granny flat worth the cost?
Custom designs tend to be more liveable and can boost your home value.
An average starting price for a rentable granny flat is around 120k, though this can be cheaper and negotiated in some areas. This may seem significantly more expensive than a modular option, but it also considers your individual needs and property requirements. Most builders will liaise with council on your behalf – a process that can take up to eight months.
Custom builds give you the power to choose your own materials and finishes, so you can make a more luxurious and long-lasting abode.
The materials you chose will be the main deciding factor in the cost of a custom-build. Cheap materials usually don’t last as long and may end up costing you further down the line in maintenance. Plus, if you plan on making the granny flat a rental, you should opt for sturdy, quality materials to avoid replacement costs.
How do I fund a granny flat build?
There are a range of finance options that can help you to build your granny flat. Whether you want to refinance your existing home loan from another lender, or you only need a loan for the construction of your granny flat – Gateway can help.
Our home loan experts are here to help you with any questions you may have and guide you through the finance process. Contact us for more information.
