
How Much Does It Cost to Build a Granny Flat
29 Sep, 2025
Building a granny flat is a fantastic investment. Whether you want to build one to rent out and receive passive income, want to create a comfortable space for a family member, or simply want to increase the property value of your property, a granny flat is a great way to go. But before you go forth, it’s vital that you understand the cost to build a granny flat. In this article, we will walk you through the expenses associated with building a granny flat, and give you great tips on how to stay within budget.
Definition of a Granny Flat
A granny flat, known formally as a dependent person unit (DPU) or an accessory dwelling unit (ADU), is a self-contained living space located on the same property of a pre-existing home. These granny flat units vary greatly in size and style, ranging from a simple one-bedroom setup, to a more elaborate structure with multiple rooms.
Why Build a Granny Flat?
There are a variety of reasons why building a granny flat can be a good idea, especially if you have the land to support it. As we stated in the introduction, they’re great at boosting the property value of the house, and can even be a stream of extra income if you rent it out. Mainly, it’s also excellent for either ageing parents, adult children, or guests staying the night. If you commission a granny flat that is durable and well-constructed, its multi-purpose nature is excellent for any household and well worth the cost to build a granny flat.
Key Factors Influencing Costs
The cost of a granny flat can vary widely across several different factors. These are some of the key elements that will influence the final price:
Size and Design
Obviously, the bigger the granny flat, the bigger the cost, as it will require more funding in terms of materials and building costs. If you’re planning on having a large floor plan or multiple floors, expect there to be a higher cost.
Location
The location of your property can also affect the cost. In areas with high construction demand or strict zoning regulations, prices can increase. Not to mention, some local councils enact extra fees which can affect the source significantly.
Construction Materials
The type of materials that you choose to use can also make a huge difference. On one hand, using premium materials will likely mean a higher up-front cost. But on the other hand, opting for cheaper materials can lead to recurring maintenance issues down the line. Budget carefully so you can figure out what you want to splurge on.
Labour and Contractor Fees
Hiring a reputable contractor is crucial for a successful build. The labour costs can vary widely depending on the experience of the contractor as well as the complexity of the project. This is why it’s important to obtain a vast amount of quotes to ensure you’re hiring a reliable person.
Average Costs Breakdown
While costs can vary for many different reasons, here is a rough breakdown of the different construction phases that can influence the granny flat cost.
Planning and Permits
Before the beginning of construction, you need to obtain the necessary permits and approvals. This process can include architectural plans, site surveys, and other counsel fees.
Construction Costs
The lion’s share of the budget will be dedicated to the actual construction of the building. Costs are usually calculated by the square metreage, so keep the size of your floorplan in mind when you’re choosing to build.
Interior Finishes
Flooring, cabinetry, fixtures, and smaller appliances can add greatly to your costs. Luxury furnishings will obviously cost more, so it’s important to decide which ones you want to invest in.
Utilities and Services
Finally, if you’re planning on your granny flat having a toilet, kitchenette, or even just working lights, you’re going to have to connect it to water, electricity, and sewage systems. This is a vital process that needs to be done for the house to be livable and will add to the cost.
Tips for Keeping Costs Down
Despite all of these costs you need to consider, building a granny flat doesn’t have to break the bank. Here are some of the strategies that can help keep down the franny flat cost:
Choose a Simple Design
Choosing a humble or straightforward design is vital for minimising costs. If you want to look at specific designs, Premier Homes has a wide range of granny flats you can browse to see which one is the one you like best.
Use Cost-Effective Materials
Make sure to use cost-effective materials that strike the right balance between price and quality. For example, using vinyl flooring over hardwood. The money you save can be used to splurge on other things, such as a high-quality bathtub, for example.
Obtain Multiple Quotes
The ultimate way to ensure you’re getting the best possible deal is by quoting several builders and contractors to ensure you get the fairest price. Be sure to get customer testimonials, check their references, and verify their credentials before committing to a specific builder.
Get the Granny Flat of Your Dreams with Premier Homes
Building a granny flat can be a rewarding project that adds value to your property and provides additional living space. By understanding the costs involved and planning carefully, you can create a comfortable and affordable granny flat that meets your needs. Remember to consider all factors, obtain multiple quotes, and explore financing options to understand how much does it cost to build a granny flat.
If you want to learn more about what a granny flat can look like for you, then you need Premier Homes. We have been in the home building business for 40 years, designing and crafting homes for households all over Victoria. We are utterly unmatched in quality, using local materials and being 100% compliant. If you want to get a sense of our houses, feel free to take a tour of our display village in Bayswater North to fully step inside our granny flat models and see what’s right for you. If you have any questions or would like to book a consultation, do not hesitate to get in touch with us.