Understanding the Costs of Designing and Building a Granny Flat in Australia…

Are you considering adding a granny flat to your property in Australia? 

Whether accommodating ageing parents, providing a rental income, housing grown up kids struggling to afford to move out, student accommodation, guest accommodation, airbnb rental or just creating extra space, understanding the costs involved in designing and building a granny flat (also known as a secondary dwelling) is crucial. 

Understanding the costs of designing and building a granny flat in Australia is an important process prior to signing up. The expenses associated with building a granny flat can vary depending on factors such as location, size, site conditions, design complexities, building materials, and local regulations. We’ve set out a breakdown below to help you get an estimate of how much it might cost:

What are the Costs involved in Designing and Building a Granny Flat ?

We have summarized the basic costs for anyone seeking to design or build a granny flat. Our list has been carefully & thoughtfully compiled to make your granny flat journey as easy as possible.

Our list is in order of the necessary sequence to achieve a successful outcome. Feel free to contact any of the companies mentioned in this article for more information.

We are seasoned, experienced designers & builders with a ton of knowledge in this space.  Hope you enjoy reading through “Understanding the Costs of Designing and Building a Granny Flat in Australia”.

Before You Start – what you need to know before you spend any money ?

Before you start on your granny flat journey you need to know if your proposed dwelling can be approved or not ? and what type of application is required ?

First of all, granny flats are known as secondary dwellings but can be known by different names in various states of Australia. The various states, territories and Local Councils also have differing rules and conditions of approval.

This comprehensive “State by State Granny Flat Approvals Guide” will help in determining what you need to do to gain approval.

There two routes to gaining approval. The first and easiest route is by way of a Complying Development Certificate (CDC) and the second route is the most dreaded route, by way of a “full blown” Development Application (DA) to Local Council. In essence a CDC can take as little as 10-20 days for approval whereby, “triggering a DA” can literally take months, sometimes even years for approval.

The vast majority of granny flats are approved under a CDC so long as the basic rules are followed. Some situations that may trigger a DA include not sticking to the following basic rules:-

• Block size. Block size does matter. For example, in NSW, the main block needs to be a minimum of 450m2.
• Exceeeding the Council’s maximum size limit ie.) 60m2 in NSW. Decks and carports / garages are usually not included in this Floor Space Ratio calculation.
• Setbacks differ from State to States and local Council to Council.
• Situating the granny flat too far way from the main dwelling.
• Siting the granny flat in an environmental protection zone.
• Siting the granny flat in a flood prone area.
• Exceeding the height limit of the local Council Development Control Plan (DCP).
• Siting the granny flat to the front or side of the main house. Some Councils do allow this but you need to check first.
• Parking and driveways. Some Councils vary in requirements ie.) number of additional parking spaces. Corner blocks are good as you can gain separate access via a side street.
• Bedrooms – some Councils have limits on number of bedrooms.
• Kitchen & laundry. To be classified as a secondary dwelling (granny flat) you are required to have a separate laundry & kitchen space. Think carefully, as there is much less restrictions on approval of say an addition or extension. For example no additional parking spaces required and number of bedrooms can be increased.

The Cost of Triggering a DA ?

The vast majority of granny flats are approved by way of a Complying Development (CDC). However, if you are in the unfortunate situation of needing to go by way of a Development Application (DA) with your local Council, then you need to be aware of the following :-

Every single DA requires a “STATEMENT OF ENVIRONMENTAL EFFECTS (SEE)”, no matter how small the project is. This includes Secondary Dwellings (granny flats).

A Statement of Environmental Effects (SEE) is required to be submitted with every development application. The SEE is a document that outlines the impacts of a proposed development and outlines any steps taken to protect the environment and to manage impacts.

The statement should address the following matters:

• A full description of the proposed development, including operational details
• The environmental impacts of the proposed development.
• How the environmental impacts of the proposed development have been identified.
• The steps to be taken to protect the environment or to lessen the expected harm to the environment, and
• Whether or not the proposed development complies with the Council policies (i.e. LEP and DCP) and any other applicable legislation or planning instruments. Justification for any part that does not comply with policies or legislation should be provided in the statement.

The information in the SEE will be used to assess the impact of the proposal, and provides an opportunity to detail information that may not be shown on plans.

The main function of the statement of environmental effects is to provide a description of the development in simple words and also to assess how the development responds to the requirements under the legislation and development controls.

The SEE should only be prepared by a professional such as a Town Planning Consultant.

Construction Costs

The Construction costs will likely be the most significant portion of your budget. As a quick overall guide before getting into the “piece by piece” cost of building a granny flat. On average, Unit rates (prices that include everything inclusive of labour, materials, profit & overheads) can range from $1,500 to $3,000 per square metre of floor area for a good quality granny flat.

The choice of materials, design complexity, and need for customizations will affect the cost of your granny flat. Converting say a 60m2 granny flat on the cost guide of $1500-$3000 per m2 = $90,000 – $180,000. You can certainly spend more than this. In fact, the sky is the limit if your budget exceeds the above costings.                                                    

Design and Approvals

Design and approval costs are essential to factor in. You may need to hire an architect and/or designer, or a specialist granny flat Builder to create plans that comply with local building codes. Approval fees from local councils can also vary. Budgeting around $5,000 to $15,000 for this phase of your project is a reasonable estimate. 

Site Preparation  

You may also be required to import fill to raise the proposed floor level to comply with local building regulations. This can be a costly unforeseen expense so be sure to ask plenty of questions before proceeding with any of the works.

Preparing the site for construction may involve tasks such as clearing vegetation, trees, old buildings, sheds, swimming pools, clotheslines, fencing, excavation, and levelling or “benching” of the proposed granny flat site. 

You may also be required to engage a geotech engineer to determine the type of footings and/or foundations required. Soil tests may also be required to determine this. Costs for site preparation can range from $2,000 to $10,000, depending on the condition of the land and what’s required as a foundation.

Types of Footings/Foundations 

Concrete footing; brick piers, bearers and joists.

Old school but still very popular. Pegout out area to be piered, pier holes are dug, tie down rods installed, concrete piers poured, brick piers laid, bearers & joists installed (usually timber but can be steel). Chosen flooring (usually particle board sheet flooring) then installed on top of bearers & joints. 

Uni – Piers

Steel adjustable piers.Very easy to use. Pegout area to be piered, dig pier holes, install Uni-piers; pour concrete around Uni piers, connect bearers & joists (flooring system) to the unipiers. Uni Piers are ideal for difficult sites with limited access to the rear yard, for example, sloping sites whereby heavy machinery can’t be used and it’s therefore more economical and faster to install Uni-Piers.

Mega Anchor 

Proven system, no excavation required, one or two men can install piers with a jackhammer, in one day. Mega Anchors are ideal for difficult access sites like backyard granny flats with limited access to the rear yard. No digging of pier holes and/or concrete required, which is a huge plus.

Slab on Ground 

Used extensively throughout the granny flat industry. No rhyme or reason why it is used so often ? It’s usually because Builders’ aren’t prone to change. The old “if it aint broke don’t fix it rule“ applies. Slab on Ground requires excavation, removal of leftover dirt, sometimes importing of fill to raise site to approved level, formwork, steel placement & concrete pour, curing of concrete etc, stripping of formwork and removal of same. This is slow going and more costly than other methods. 

Associated Costs

Utilities and Services

Connecting the granny flat to existing utilities (water, electricity, gas, sewer) will incur additional costs. These costs can vary, but it’s wise to allocate around $5,000 to $10,000 for these services for a straightforward block. Example of a costly exercise: your block slopes away from the street to the rear with sewer & stormwater required to be pumped uphill to the mains lines. It’s very imporant to check for all services ie.) easements for sewer, water, power connection etc. well in advance in the planning stages to avoid costly disappointment.

Interior and Exterior Finishes

The quality of finishes you choose for the interior and exterior will impact costs. Flooring, fixtures, and appliances all contribute to the final bill. A mid-range estimate might be $10,000 to $20,000, but this can increase with high-end choices. Make a list and go shopping/check pricing on all items before finalizing your final budget.

Additional Features

If you want special features such as a deck, landscaping, or custom-built furniture, you should budget accordingly. These can add anywhere from a few thousand to tens of thousands of dollars.

Labour Costs

Labour costs for construction can vary based on location and demand for skilled workers. It’s a significant factor so best to obtain quotes from multiple builders. This can help you gauge the average labor costs in your area.

Government Fees and Levies

Depending on your location, you may be required to pay additional government fees or levies. These can include contributions to infrastructure or development charges.

A good architect will supply a list of all likely relevant fees. Or you can check with your local Council for clarification.

Project Management

Hiring a project manager or builder to oversee the construction can add to your expenses. While it may seem like an extra cost, it can save you time and ensure the project runs smoothly. For some people this is the only option.

For others they are more than happy going with a specialist granny flat builder, who takes care of the whole planning & building process, delivering a “turn key” product ready to move in. Another option is to go Owner/Builder.

If you choose this path make sure you are capable & confident of handling all the issues that may arise.This path can often be fraught with disappointment and end up costing more than going with a Builder.

Contingency Budget

Unforeseen issues can arise during construction, necessitating a contingency budget. Allocating 5% -10% of your total budget for contingencies is a good practice.

Time lags and inflation can result in price increases. Quite a common occurrence right now, so allow 10% -15% if you are unsure. Better to be safe than sorry when it comes to budgeting.

FAQ’S – Frequently Asked Questions About Granny Flats

1. How much does a Granny Flat cost ?

Granny flat prices vary widely depending on several factors. These include the size, design, building materials, level of customization, and even the location of the property. Site conditions, such as slope or accessibility, and the reputation of the builder also play a significant role in determining costs.

Granny Flat Pricing (Guide Only):-

• Studios: $50,000 – $80,000
• 1-Bedroom Granny Flat: $80,000 – $130,000
• 2-Bedroom Granny Flat: $130,000 – $190,000
• 3-Bedroom Granny Flat: $190,000 – $285,000

Note: These are indicative prices. The final cost may vary depending on the factors outlined above. It’s always recommended to get a detailed quote from a reputable builder.

2. What factors influence the cost of a Granny Flat ?

The cost of a granny flat is influenced by:-

• Design complexity: Custom designs cost more than standard layouts.
• Building materials: High-quality materials, such as premium timber or stone, add to costs.
• Site conditions: Sloping blocks or difficult-to-access sites require more groundwork.
• Local regulations: Compliance with local council rules or zoning may add to approval costs.
• Optional extras: Features like solar panels, smart home technology, or luxury finishes will increase the price.

3. Are there hidden costs associated with building a Granny Flat ?

Yes, additional costs may include:-

• Site preparation: Clearing, leveling, or adding retaining walls can add to expenses.
• Utility connections: Connecting water, electricity, and sewage lines may not always be included in base pricing.
• Approval fees: Local council approval fees or permits can vary significantly by region.
• Landscaping: Adding driveways, pathways, or gardens can also increase costs.

4. Is it cheaper to build a prefab or a custom-designed one ?

Prefab granny flats are typically more affordable due to standardization and faster construction times. Custom-designed granny flats, while more expensive, allow for tailored layouts, unique finishes, and adjustments to suit specific needs or site conditions.

5. How long does it take to build a Granny Flat ?

The timeline for building a granny flat depends on the complexity and size of the project.

• Prefab granny flats: Often take 6 – 12 weeks once approvals are in place.
• Custom designs: May take 12 – 20 weeks or longer due to detailed planning and construction processes.
  Tip: Ensure all approvals and site preparations are completed to avoid delays.

6. Do Granny Flats increase property value ?

Yes, granny flats can increase the overall value of your property. They add additional living space and are attractive for rental income opportunities or multi-generational living. However, the exact value added depends on factors like location, quality of construction, and market demand in your location. Conversely, it could potentially work against you. Example: an affluent suburb where potential buyers prefer the larger spaces/ gardens without additional occcupants.

7. Can Granny Flats be rented out legally ?

In many parts of Australia, granny flats can be rented out as separate dwellings, but this depends on local council regulations. Check zoning laws and requirements in your area before proceeding.

8. Are Granny Flats environmentally friendly ?

Yes, modern granny flats can be designed with energy-efficient features such as:

• Solar passive design – (costs no extra)
• Solar panels
• Water-saving fixtures
• Insulated walls and roofing
• Smart lighting systems
• Choosing sustainable building materials can also reduce the environmental impact

9. Do I need Council approval to build a Granny Flat ?

Yes, council approval is typically required. Regulations vary by state and local government, so you’ll need to check:

• Maximum allowable size
• Setback requirements
• Building height restrictions
• Parking provisions
  Consulting a professional builder or planning consultant can simplify this process. Best to have your granny flat legally approved too, just in case you decide to sell in the future..

10. What is the lifespan of a Granny Flat ?

The lifespan of a granny flat depends on the quality of construction and maintenance. With durable materials and regular upkeep, a granny flat can last 50 years or more.

Conclusion

In conclusion, estimating the cost of building a granny flat in Australia is complex and depends on various factors. It’s advisable to consult with local builders, architects, and authorities to get accurate quotes and ensure compliance with regulations. Doing thorough research and planning can help you manage your budget effectively and turn your granny flat vision into a reality.

Good luck on your granny flat journey ! 🙂