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How Much Does a Granny Flat Cost?

Have you heard about the cost-effective trend of building granny flats? You can get dozens of square meters of extra living space for less than the cost of constructing a separate building on your property.

How much less? Take a look at the approximate prices in the table below!

Granny Flat Style


One Bedroom

$150,000 - $200,000

Two Bedroom

$250,000 - $300,000

Three Bedroom

$300,000 - $350,000

Two Storey

$280,000 - $320,000


What Is a Granny Flat?


If you’re not familiar with the term, it comes from a trend of building small, separate living spaces for older family members. Now, however, the granny flat trend has grown into something far more robust.

Families use them as teenager hangouts, office or hobby spaces, guest housing, and (where it is allowed) as an income stream.

To qualify as a granny house, the structure must have independent living space. This includes a bathroom, kitchen, outdoor space, and private entrance.


Ways to Build a Granny Flat


Granny flats are cheaper than traditional buildings because of their prefabricated construction. There are three options for how the granny flat will arrive at your home.


Flat Pack

The prefabricated pieces of your granny flat arrive ready to be assembled on site. To prepare, you have to have the foundation installed and the connections put in for water and electricity.


Granny Flat Kit

A granny flat kit is similar but the pieces come somewhat assembled. This allows your granny flat builders to put the flat together much more quickly, making construction a breeze!


Custom-Build

The only major downside of the flat packs and kits is their lack of customisation. Though there are various designs you can choose from, they won’t always fit every homeowner’s needs.

To build the flat exactly how you want, you’ll need a custom solution. Custom solutions run about $100,000 more than the flat packs and kits.


Granny Flat Costs and Sizes

The size of a granny flat doesn’t vary too much. For example, the maximum allowed size in NSW is 60 m2. The minimum one-bedroom size is 35 m2.

Three-bedroom granny flats (yes, they exist!) tend to have smaller bedrooms or sacrifice a bit of kitchen or living space.

Regardless, the price does go up a bit according to how many bedrooms the flat has. Expect to pay:

  • One bedroom: $150,000 - $200,000

  • Two bedroom: $250,000 - $300,000

  • Three bedroom: $300,000 - $350,000


Is Council Approval Required to Build a Granny Flat?

Your local council will have to sign off on the construction. Rules of use and building regulations vary somewhat from area to area.

Some places, like Victoria, don’t allow you to rent out the building to non-related family members. Be sure to check the laws in your area before you begin construction to ensure your planned use is allowed.


Does a Granny Flat Add Home Value?

A granny flat adds usable living space to your property. Thus, it does add home value.

How much depends on a variety of factors. However, you will be happy to hear that research conducted by CoreLogic found that the addition of a granny flat could raise home value by about 30%!


Know Before You Buy

Whether you want a granny flat for the traditional use of housing an elderly family member or you plan to rent it as extra income, it’s vital to do your research. There are lots of “great deals” out there that turn out to have way too many hidden fees.

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