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The granny flat comes of age
02 December 2015
And they’re not just being built as independent accommodation for elderly residents. In 2013, WA Government planning legislation allowed for granny flats up to 70sqm to be built in suburbs across Perth and to be leased for rental return, rather than limited to occupation by a relative of the owner.
Dominique Travers, managing director of Addstyle Constructions and West Coast Granny Flats, said while there had always been a steady demand for quality, customised detached or attached granny flats, homeowners now recognised the investment opportunities of ancillary accommodation.
“Students, FIFO workers and young couples starting out are all ideal granny flat tenants, who are willing to pay $300-$400 a week for accommodation,” Ms Travers said.
“Many property owners are providing tenant access via rear lanes or erecting fencing and installing separate utility meters to create an informal division for independent rental accommodation in their own backyard.”
Ms Travers said loan repayments on a custom-built granny flat costing about $110,000 were about $150 a week, with expected rental return of $250-$400 per week, for an ideal positively geared investment.
“In a city where the median house price has risen above $500,000, it’s more difficult than ever to enter the property market and many homeowners are adding granny flats to their properties for their young adult children to occupy,” she said.
“Our ageing population has also resulted in added demand for granny flat accommodation as the ideal ‘lock and leave’ home for retirees while they travel.”
Ms Travers said granny flats made ideal home offices or studios, with one of her clients recently adding a granny flat for a family day care business.
Dale Alcock Home Improvement general manager Steve Grehan said an initial spike in demand for granny flats in response to the planning changes had led to ongoing steady numbers for the company.
Mr Grehan said DAHI had built five to 10 ancillary accommodation projects a year before the R Code changes in 2013 but would build 30 double-brick customised granny flats this year.
“We are still seeing a strong demand as a solution for extended families, and investors see granny flats as a great way to increase rental yields on existing investment properties,” he said.
Two-bedroom designs were most popular but DAHI also had a range of one and three-bedroom designs from 50-70sqm, with options for raised ceilings and alfresco areas. Prices started at $99,000.
The company was also exploring different shapes to suit tight blocks and recently launched a two-bedroom, two-bathroom option.
“Granny flats have had a revival in the last few years and they can serve a variety of purposes and offer a range of benefits,” Mr Grehan said.
“We expect they’ll continue to be part of the housing mix, whether people are building them as independent living for grandparents or teenagers, using them as a home office, or creating a studio-style home for rent-paying tenants.”
Summit Granny Flats, established in the wake of the legislative changes, has capped the number of its projects at 50 for 2015, to maintain quality in service and construction in response to overwhelming demand, according to general manager Chris Johnston.
“Granny flats aren’t just for grannies any more — pretty much anyone at any stage of the home-buying cycle can benefit from this style of home.”
The builder has options for lightweight framing with Masterwall, for speed of construction and thermal qualities, or standard double brick construction. Summit also offered the option of a “move-in ready” granny flat, with painting, floor coverings and window treatments included in the contract price.
“Designs that optimise independent living are driving a new range of granny flats that incorporate fully enclosed single car garages and alfresco areas as standard,” Mr Johnston said.
“With multi-generational living continuing to grow in popularity, the boomerang generation leaving home and then returning, and the affordability of granny flats as an investment option, we foresee demand will significantly grow into the future.”
Who might a granny flat suit?
Granny flats are no longer limited to elderly relatives seeking a place to live with a degree of independence while maintaining family ties.
Such as: Students seeking affordable rental accommodation close to university or college; FIFO workers wanting a secure, easy-care home for the weeks in between work shifts; adult children keen to stay close to the family; young couples starting out; investors looking to attract tenants in accommodation behind an existing rental to increase income; artists, writers and others working creatively from home; and people keen to run a home-based business away from the main house.