Record Number of Granny Flats Being Built in Sydney?

According to reports, the number of granny flats being approved and built in New South Wales in the last 12 months is at an all time high. With nearly 5000 granny flats being built a year, that’s an increase of more than 260% between 2009 and 2014.

So, why are so many people choosing to build a granny flat, or second dwelling as they are officially called, on their land? What are the benefits of a granny flat in Sydney, and what do people do with them once they are built?

Reasons to Build a Granny Flat in Sydney

The obvious reason for building a granny flat is to create an extra space. Whether it’s needed to accommodate guests or family, to create an office, or as an independent dwelling for teenagers – a granny flat can be the perfect cost-saving solution when your home is not quite big enough for everyone.


  • Quick to build
  • Modern
  • Affordable
  • Value Add
  • Create minimum amount mess/inconvenience during construction

A granny flat may have a multitude of uses – it can be designed to rent out to tenants, or as a second home to move into yourself, freeing up your main home to maximise rental income. It’s also a great way to accommodate young adults still living at home, or ageing parents who may need family close by.

Since 2009, the law has allowed two-bedroom granny flats to be built within all residential zones across NSW, with approval taking less than 10 days. Provided your lot size is a minimum of 450m squared, council approval is not required.

Rental Income in Sydney

Research has shown that rent for granny flats is the highest it has ever been. Homeowners with a bit of land to spare are finding that Sydney granny flats are a fantastic financial investment, which potentially creates two sources of income from the one property. The weekly rent has increased nearly 6%, which is higher than the increase seen on rent for houses or apartments.

There are granny flat designs in Sydney that are available for $190 per week (Cambridge Park), and others that are advertised for $650 per week (Pymble). On average, granny flats in Sydney can expect $292.46 per week– which is the highest in the country.

In certain areas, you can expect to charge a lot more. In Frenchs Forest, Dee Why, Wheeler Heights, and North Manly, granny flats are being rented for thousands of dollars a month.

North Ryde, Avalon Beach, North Curl Curl, and Kingsford are also high-grossing areas. In contrast, the suburbs that receive the lowest rental income are West Ryde, Rockdale, Arncliffe, South Hurstville, and Liverpool.

The Granny Flat Boom and The Housing Bubble in Sydney

There has been a boom of high-density developments in Sydney but there will always be a demand for affordable housing. As more international buyers move into the area, dwellings are required for family members and a granny flat is the ideal solution. As for the rising rent, supply and demand, the vacancy rate, and factors such as the number of first-time buyers in the area, migration, and the state of the rental market, all contribute to the increase that we have seen.

A granny flat is an excellent idea to provide extra space for you and your family, and a way to earn extra income. Visit our Homepage for inspiration on granny flat designs to suit your requirements – or to find out more.

For more information on ways to add value to a house, contact Rescon Builders, the renovations and extensions experts in Sydney and NSW.