Monash: call for granny flat restrictions to be eased
Monash agents are urging council restrictions on the humble granny flat should change, so homeowners can increase the value of their properties.
Installing a self-contained unit could boost a property’s value, according to new research, but experts say tough council restrictions could make cashing in unlikely.
Building a one-bedroom self-contained unit costs about $120,000 and two-bedroom flat about $200,000, but it could boost a property’s value by 30 per cent, according to a CoreLogic and Archistar report.
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It shows Glen Waverley and Wheelers Hill have 2322 and 1818 properties respectively with potential to install a 60sq m self-contained unit.
But experts say the value added by granny flats is overstated because tough council restrictions could turn the dwellings into a burden.
Monash council laws state a unit must be removed from the property once it is no longer required by a dependent and cannot be rented out.
OBrien Oakleigh director Max Martinucci said the restrictions should be loosened.
“If you’ve got a family member or a dependent you’re looking after, that’s the only real circumstance in Victoria that you can have that granny flat used — you’ve only got a select few groups that you can market to,” Mr Martinucci said.
“We’ve got more people coming to Victoria than any other state and for that reason they should remove the rules around it.
“The people I speak to, because of mortgage stress, say it would be great to put in a granny flat to lower their mortgage repayment.”
Jellis Craig Doncaster agent Matthew Lockyer said if restrictions were “relaxed” there could be security, health and financial benefits.
“If you’ve got a big block of land and you’ve got space enough to build a house for the parents in the backyard, it makes perfect financial sense,” Mr Lockyer said.
“To me it is something that probably hasn’t been discussed widely because there is so much red tape.
“If there were more relaxed ideas around how it looks and how it works — it would help a lot of things.”
Wakelin Property Advisory director Jarrod McCabe said it might not even be possible to get a return on the cost of installing a granny flat.
“It’s almost a little bit like a swimming pool — you do it because that’s what you want, but in and around Victoria, it’s not necessarily going to add value,” Mr McCabe said.
“There was talk about it being a way for investors to improve their yield but typically the areas you can add that granny flat are not going to be the ones owned by investors.”
Mr McCabe said that the more “traditional” method of subdividing was a simpler alternative to ease housing pressures.
CoreLogic head of research Tim Lawless said granny flats had become “an increasingly compelling proposition for homeowners in a relatively lacklustre market”.
Mr Lawless said granny flats could also help address the Melbourne market’s affordability challenges, by providing space for adult children to live independently at home while they saved for deposits and increasing housing supply in infrastructure-rich suburbs.
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