SHOULD WE BUILD A GRANNY FLAT?

3 minute read

Now that the Queensland Government has passed new laws that open up the letting of Granny Flats to people other than immediate family members, does this mean you should run out and build one?

I was chatting with my good friend Peta Charles who is the Head Planner at Brisbane Town Planning about how this new legislation will impact property moving forward, and her first thoughts was to council. What a logistical nightmare for them right now!

Firstly, all the usual planning restrictions and guidelines will still apply when it comes to the design and approval process of these secondary “backyard dwellings”, but looking at the bigger picture, it will certainly get investors and home owners thinking about how they can capitalise on this new found legislation, particularly if they’re in the market for a new investment property or are considering a home renovation.

One thing’s for sure, I bet my friend Peta is going to see a flood of enquiry from homeowners looking to value add their existing home with a Granny Flat.

Investors will certainly be asking the question, “does it have potential to build a granny flat” as this secondary dwelling will result in a yield increase, which will help with holding costs and in general, make the investment proposition look a lot more attractive. 

But, as with all legislative changes, we usually see the immediate positives, and I’m all for supporting additional housing during this crisis time, but we’re yet to see the downsides of how this new Granny Flat era will impact property in the longer term.

Right now, I’m asking myself questions like the following…

What happens after three years (the proposed review time) when the government decides the housing crisis in Queensland is over and they revert back to the original laws where only family unit can inhabit the flat? 

Where does this leave investors who saw additional value (and paid accordingly) in purchasing a property that had an existing granny flat, or potential for one? 

Do you take the punt and hope the legislation doesn’t revert?

Will every second house in my quiet residential street have a granny flat by 2025? 

Many of my home buyers opt for low density areas but will they soon find themselves living in double the density because all their neighbours decided to build a granny flat and rent it out for extra income? 

It’ll no longer be Paul and Stacey next door. We’re also waving to Kim and Janine over the fence too. Plus we’re sharing the street parking with all their visitors. 

So with all this said, should you go ahead and get your Granny Flat?

As an investor, I’d be cautious paying a purchase price based on the combined yield of the existing house and the granny flat. Right now, I’d treat the flat as a bonus income but I would be hesitant to attribute a significant value to it. 

As a home owner looking at the option of constructing one, I’d be first checking council’s planning regulations and guidelines and perhaps booking a meeting with Peta to see if your property will in fact comply.

Secondly, I’d be crunching some numbers on how the additional yield will offset any cost of construction. 

Right now, it might seem like a great opportunity to value add your home AND make a little rental income on the side, but the pessimist in me always looks to worst case scenarios, like what if legislation reverts and you’re left with a big fat expensive cubby house in the back yard?

Politically, I don’t see us coming back from this change in legislation, but who knows what the future holds. 


Peta shares some very useful information with respect to the planning side of a Granny Flat so if this is something you’re considering, I’d head over to her Facebook Page at Brisbane Town Planning and watch her latest video. It’s very good.

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