Does a granny flat add value to your home?

If there is one style of property that has seen growing popularity in recent times, it’s dual-living, with a larger home and a smaller dwelling out the back. 

Properties with granny flats are highly sought after on the Northern Beaches at the moment as families seek out creative ways to reduce the cost of living. With this style of property, you almost get two homes for the price of one, and the smaller place in the backyard is a great solution for young adults or ageing parents. 

Let’s explore that question and look into the rise of the Aussie granny flat.

What is a granny flat?

A granny flat is a smaller second dwelling that shares a block with a larger primary dwelling.

Usually, granny flats are sized to accommodate one or two people but are fully self-sufficient with a bathroom and a kitchen. 

The name granny flat comes from the idea that it was a separate dwelling for an older female relative. While some are touting the term ‘Fonzie-flat’ after Arthur Fonzarelli from Happy Days, the term granny flat is deeply ingrained.

Why are granny flats becoming more popular?

The rise in popularity of the granny flat has been primarily fueled by rising house prices and the rental crisis, which have both pushed up rates of multi-generational living.

There’s no denying costs have risen on the Northern Beaches. A quality family home with more than two bedrooms is now priced in excess of $1.5 – 2 million, while two bedroom units mostly start from just below $1 million. Meanwhile, renting is becoming more expensive as well.

Granny flats make sense for the following reasons: 

  • A cost-effective way for a whole family to buy a place together.
  • Boomer parents can add a granny flat to increase the value of their property and lease it to their adult children.
  • Adult children can add a granny flat and move mum and dad into it.
  • A flat can be a great way to add to the value of your property and generate some rental income without the stress of buying a new place.
  • They are generally relatively easy and fast to build.
  • Council is likely to approve a well-designed granny flat on the Northern Beaches.
  • Retirees have the option to move into their granny flat and lease out their home.
  • Lower entry costs if adult children want to build a granny flat on their parents’ land.
  • Multi-generational living means young parents get help with the kids and older parents have on-call tech support as well as someone to keep an eye on their wellbeing.

How much value does a granny flat add to your home?

A granny flat will generally add around 20 to 30 percent to the value of your property, but there are two caveats.

Firstly, it’s very important your granny flat has council approval. If it is built without formal permission, there may be penalties or it may be hard to sell. If possible, try to have the granny flat built so it has its own address (e.g. 19a) and its own electricity/gas/internet connection. 

The other caveat is that when the time comes to sell, you will have to find a buyer who wants a granny flat. Fortunately, this isn’t a problem on the Northern Beaches, where many buyers are looking for the additional income or accommodation solution, or a home office or guest bedroom. 

Adding a granny flat to your home on the Northern Beaches

Granny Flat Solutions, Bungalow Homes and Baddock Building are all locally run construction companies specialising in high-quality granny flats on the Northern Beaches, including North Narrabeen, Narrabeen, Elanora Heights, Ingleside, Warriewood and Mona Vale. All three companies are familiar with the lay of the land on the Northern Beaches and will have a design and construction solution to meet your needs.

Not only granny flats

Homeowners are thinking outside the square when it comes to multigenerational living, for example by dividing two storey dwellings into separate units. Again, this turns one home into two and can accommodate multiple generations, giving everyone privacy. 

If you’re selling a home, talk to your agent about how it can be promoted as an opportunity for multigenerational living. If there can be separate bathrooms and living areas, or a spot for a kitchenette, it’s worth highlighting. 

It’s all about flexibility and thinking outside the square. If two families have the option to buy one home, they will have a healthier budget and be able to put in a competitive offer. 

Looking for a place with a granny flat or thinking of selling your existing dual-occupancy home? Talk to HEA today. 

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