Sydney in the Midst of a ‘Granny Flat Boom’ posted on the 10th November 2015

Ipswich Granny Flats, your local Granny Flat Experts, bring to you another interesting snippet from the Sydney Granny Flat Market…

Ingrid Fuary-Wagner
4 November 2015

Sydney in the midst of a ‘granny flat boom’

When Penelope Roberts and her husband Nicholas bought their Federation home in Randwick back in 2006, the dilapidated old shack in the garden required serious consideration.

The structure in question was an old stable where the original well-to-do owners had once kept their horse.

“I liked the stable because I’m a country girl, but it was really run down,” Roberts says.

2_gkotrbPenelope Roberts thinks her family’s Randwick granny flat will be a drawcard for potential buyers. Photo: Edwina Pickles

But her husband immediately saw the potential of turning it into a functional, habitable space.

“We also knew it was a drawcard because at that point it was hard to get a second dwelling approved,” she says.

1446440673052The backyard granny flat at 18 Oswald Street in Randwick used to be a stable where the original owners kept their horse. Photo: Edwina Pickles

That was before the law changed in 2009, allowing granny flats – or second dwellings as they are officially called – to be approved within 10 days and to be built within all residential zones across NSW.

Since then, NSW has experienced huge growth in granny flats, with a 260 per cent increase over five years to June 2014.

Associate Director at research house BIS Shrapnel, Kim Hawtrey, says that while there’s been a lot of focus on the construction ‘boom’ of high-density developments, the rise in the affordable alternative has gone largely unnoticed.

“It is a granny flat boom. We are building almost 5000 granny flats a year in New South Wales,” Hawtrey says.

That figure translates to nearly one granny flat for every 10 new dwellings approved.

According to Hawtrey, there are plenty of reasons why second dwellings have become so popular, including the fact that children are living with their parents longer as well as an ageing baby boomer population.

“You could get a $400,000 apartment or you could build a $150,000 granny flat – so it’s the cheaper option.”

1446441143720The Roberts family has used their granny flat as a home office, guest house and extra space for two teenage boys. Photo: Edwina Pickles

Then there’s the surge in overseas migration, with anecdotal evidence suggesting granny flats are more prevalent in areas with a greater proportion of migrant families.

“International buyers often have multi-generational members of the family around,” Hawtrey explains.

“It means family members can come and stay or live and still have a degree of independence.”

Screen Shot 2015-11-09 at 9.18.35 pmInvestors are also tapping into this opportunity, with the potential to earn two lots of rent from one property.

The BIS Building Industry Prospects report shows that a granny flat can improve the rental income on the median house in Sydney from 2.5 per cent to 3.6 per cent – a return of $300 extra per week.

Some home owners are even moving into their granny flats and renting out their main homes, Hawtrey says.

Within Sydney, Bankstown, Blacktown and Parramatta in particular are seeing an increase in granny flats.

Screen Shot 2015-11-09 at 9.19.35 pm

Hawtrey says people have come up with ways to deal with the affordability crisis by making use of the quarter acre block.

“It goes to show we don’t necessarily just need high rise buildings to solve the issue of a booming population and affordability crisis.”

For Penelope Roberts, her backyard stable turned granny flat has been used as a home office, an extra space for her teenage sons and a guest house where visitors can come and go as they please.

And now that her home is on the market, she thinks the second dwelling will definitely add value to the property.

“I think it is a big drawcard for potential buyers – it’s effectively an extra room with the house. It could be put on Airbnb or rented out as well,” she says.

Written by Sonia Woolley

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