Back in May I published a post about granny flats, and it seems I’m not the only one who thinks there is a lot more potential in this humble add-on than many home owners realise.
According to the property analysts at CoreLogic, more than half a million home owners across Australia’s eastern seaboard have enough space on their properties to build a granny flat. These flats could boost a home’s value by as much as 30 per cent and add significantly to a property’s rental income.
CoreLogic teamed up with Archistar to analyse the data on granny flats and they identified 583,440 properties in Sydney, Melbourne and Brisbane that meet the criteria for an additional self-contained unit of at least 60 square metres. And those are just properties in the three capitals!
CoreLogic and Archistar estimate you’ll need to invest about $200,000 if you want a two-bedroom granny flat or about $120,000 for a single-bed dwelling.
CoreLogic’s head of research Tim Lawless said in a statement, “Building a granny flat is becoming an increasingly compelling proposition for home owners in a relatively lacklustre market. Not only can it help to manufacture new capital gains, but it has the potential to generate rental income while meeting demand for more affordable housing.”
Because granny flats usually rent for less than the price of a standard apartment or small home, they are attractive options for those on a tight budget.
“Many properties identified as suitable for a granny flat are in densely populated and traditionally expensive areas,” Lawless said. “More granny flats on the rental market will make it easier for young people to stay in their preferred area, rather than move further afield to find value for money.”
Robert Coorey from Archistar added, “Many home owners are sitting on a pot of gold in the form of excess land that could be developed to generate a new income stream. This has wider economic benefits for renters who want to access popular suburbs without paying a premium. The family benefits of a secondary residency can’t be overlooked, whether that’s giving adult children more privacy while they save for a mortgage, keeping loved ones close as they become more reliant on care or having additional accommodation for overseas visitors.”
And it’s not just home owners and renters who win – the extra building work would inject money into the building industry.
As I mentioned back in May there is no doubt that housing, the needs of renters and home owners and the makeup of households are changing right across the country. We need accommodation to suit not just the traditional model of a family, but also single-parent and multi-generational families as well as the tens of thousands of Australians who live alone.
There are now many more companies and builders specialising in granny flat design and construction than there used to be, so it’s never been easier to find someone who can create the perfect structure for you.
Of course, whether or not you can build a granny flat on your property – and the regulations you have to follow if you can – will depend on the state and council area you live in. You’ll obviously need to meet building codes and get all the relevant approvals before you start designing. But if you’re thinking your home and family would benefit from a granny flat, it’s definitely worth looking into.