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How Much Does it Cost to Build a Granny Flat?


Granny flats are wonderful structures to add to an existing property with various uses. While, as the term implies, “granny flats” were initially designed so that grandparents or parents of children who’d inherited their homes, would have somewhere to live on the property before they passed away, modern-day granny flats can have many uses.

If you are an older couple who wants to age in place, or if you have mobility challenges and are looking for a one-level structure to accommodate those challenges, or if you are a couple who wants more space than your current home provides, you may be wondering “How much does it cost to build a granny flat?”. This question can help you decide what type of granny flat to build and whether it is more cost-effective to build a loft onto your existing home instead of constructing an external structure.

What is a Granny Flat?

Before we dive into the cost to build a granny flat, let’s better understand what a granny flat is. A granny flat is commonly defined as a “self-contained dwelling that shares land with an existing primary structure.” Granny flats can be a garage extension onto a home or an entirely separate self-contained structure in the home’s garden. What’s important is that they’re built on the same plot of land as the primary dwelling and share the same title.

These are sometimes a preferred option for homeowners who want to have their parents living with them but aren’t looking to go the route of a duplex build and feel that the cost to build a granny flat in Sydney is better for their budget and offers more flexibility than that of building a whole other unit onto their existing home.

Additionally, a granny flat can also be used as a rental unit, perhaps for struggling students or a family friend. This rental income can then be reinvested to cover the cost of building a granny flat.

But, before exploring usage options for granny flats, let’s answer the question: “How much does a granny flat cost to build?”

What is the Average Cost to Build a Granny Flat in Australia?

The average cost to build a granny flat in Australia varies greatly by region, materials used and the overall size of your granny flat. There are Federal planning permission restrictions as to what size you may build your granny flat, insofar as it cannot take up more than 40% of the total area of your property.

However, your region will also have restrictions, such as in NSW, where a granny flat cannot be more than 60 sqm. On average, the cost to build a granny flat in NSW is between $85,000 and $100,000. In the capital, the cost to build a granny flat in Sydney is between $70,000 and $140,000+, with the lower end being one-bedroom and the upper-scale being two-bedroom units.

Meanwhile, in Queensland, the internal area of your granny flat cannot exceed 80 square metres, and the average cost to build a granny flat in QLD is between $50,000 and $200,000. In the capital, the cost to build a granny flat in Brisbane sits at roughly $120,000.

Factors That Influence the Cost of Building a Granny Flat?

As you can see, the overall cost to build a granny flat varies significantly by region, but many other factors could influence the overall cost. Let’s go over a few of these factors below.

The Number of Bedrooms

Adding a bedroom onto a granny flat is no small feat! The number of bedrooms you can include in a granny flat without breaching the sizing regulations set forth by your locality is usually limited to two bedrooms. Most of the time, one bedroom in a granny flat is plenty, if you intend to use it for a single-person rental, or as a space that your elderly relatives can live in.

In general, the cost to build a 1-bedroom granny flat is between $80,000 and $100,000 for a 35 to 60 square metre granny flat with a smaller bedroom, a larger living space and a kitchen.

Ready to Move in, or Not?

One aspect of granny flat building is that many granny flat builders provide a turn-key package that’s ready to move in with all of the trimmings and even furnishings of your choice, for a higher price tag than if you were to furnish the finished building yourself. For example, the average cost to build a furnished granny flat is between $120,000 and $140,000, versus ~$100,000 without the furnishings.

Building Site Conditions

Another important aspect to consider when choosing to build a granny flat is the building site condition. If you’ve got a wild and untamed backyard, where the grass is about three feet high and the surface isn’t level, you’ll need to factor in the cost of cutting down the grass, removing trees or shrubbery before the location of your granny flat can be levelled and ready for its foundation to be poured. The cost of this site levelling can be between $14,000 and $20,000, or less, depending on the size of your granny flat. Factor these site preparation costs into your overall building budget.

Materials Used

As with any construction, the types of materials that you use in the build will affect the overall cost. If you’re planning on cladding your granny flat with wooden siding, this will be a more expensive option than, say, vinyl siding. Or, if you plan on having big windows to let more light into a broad living space, that’s going to increase the build cost.

Building With Accessibility In Mind

If you’re building a granny flat to accommodate an elderly relative or someone with a disability in your family or friendship circle (first of all, good on you!), making these types of customisations in the granny flat is going to increase the cost of building your granny flat. Because accessible-living items like lower countertops than standard, low-rise toilets and walk-in showers aren’t manufactured as-standard. With some granny flat builders, you can expect your costs to rise to between $160,000 and $180,000 to build a completely accessible granny flat.   

Is a Granny Flat a Good Investment?

If you’re looking to build a granny flat as a rental opportunity, in the hopes that it will one day have paid for itself, then it may well be a good investment! On average, granny flat renters can expect to pay between $300-$700 per week, which means that your granny flat could pay for itself in ten years or less!

Or, if you plan on selling your home one day and are looking for ways to add value, then a granny flat can add up to 30% to a home’s overall evaluated value.

You could also use your granny flat as a yoga studio/gym (maybe you’re a yoga teacher or personal fitness instructor), but will require insurance for such things. There are myriad ways to make money with a granny flat build, even if you don’t add a bedroom and use it for renting long-term or use for AirBnB-style rentals. These options make granny flats great investments for property owners, despite their upfront expense.

Final Thoughts

As custom home builders, we understand that granny flats, whether they be to house elderly relatives, provide a safe living environment for a person with a disability, or are used as a home office or business location, offer a multitude of options for homeowners that just aren’t available within the four walls of their existing home.

If you’re considering building a granny flat, or are considering whether you could make a granny flat work with an existing garage or loft structure, book a consultation with Provincial Homes and we’ll walk you through our granny flat designs and find something that suits your needs!

Frequently Asked Questions

Are there any hidden costs associated with constructing a granny flat?

When constructing a granny flat, you may come across hidden costs. These include site survey costs, slope risk assessment fees (for sloped land), and bushfire risk assessment fees (for areas in bushfire zones). The site survey costs around $1,500 for partial survey and $2,000 for a full survey. The bushfire risk assessment fees are around $800.

Can you provide examples of different budget ranges for building a granny flat?

Granny flats can be built in a variety of ways to suit a variety of budgets. On the low end, granny flats can be built for as little as $50,000. These often use weatherboard cladding, laminate cabinetry and flooring instead of custom-built hardwood cabinets or hardwood flooring. These types of granny flats are mostly unfurnished and could be furnished by you, using recycled or upcycled furniture, rather than buying brand-new furnishings.

In the mid-range granny flats of between $70,000 and $90,000, we mostly find all-new construction, but with softwood flooring or softwood cabinetry, with low-cost metal roofing and not much in the way of customisation. These are often factory-constructed, rather than built to spec.

At the higher end of the granny flat building world, you can expect the Ritz Carlton of granny flats. Hardwood floors, low-flow toilets and showers, exterior decking, solar shingle roofing (if you’re into renewables), as well as stone or marble countertops.

Are there ways to reduce the cost of building a granny flat?

Yes! Like almost any other build you’ll undertake, there are ways to reduce the building costs of a granny flat. Here are a few of them:

     Build up, not out. Building another storey in an existing home is cheaper than building a second outbuilding.

     Consult a specialised property broker for financing your granny flat construction. They can offer better advice and help you secure the best mortgage possible for your needs.

     Consider building a granny flat without a bedroom initially to bypass the need for a permit. Use it as a home office, studio, or meeting space. Once you generate enough income, add the bedroom.