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THANKS to the State Environmental Planning Policy (Affordable Rental Housing) the humble granny flat has become an income source as well as a means of increasing the availability of affordable housing in NSW.
Gone are the days when only a dependent relative could live in the granny flat. The policy allows homeowners to place a second dwelling on the land where their principal residence stands.
This second dwelling can be used to house a relative or as a rental for an unrelated third party.
Purpose of the policy
With the increasing demand for affordable housing, the State Environmental Planning Policy states its aim is to facilitate the effective delivery of new affordable rental housing by providing incentives by way of expanded zoning permissibly, floor space ratio bonuses and non-discretionary development standards.
This change in NSW law in 2009 has resulted in a granny flat boom, particularly in places like Sydney with a 260 per cent increase in the five years to June 2014.
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A representative of housing analysis BIS Shrapnel, Dr Kim Hawtry, told Domain that almost 5000 granny flats were being built each year in NSW.
He said demand factors included children living at home longer, attractiveness to migrants and cost.
Streamlined approval process
Applications for a complying granny flat may be approved by the relevant consent authority as quickly as 10 business days, as there is no need for a development approval, only a Compliance Certificate is required.
The benefits of a granny flat
Joe Tarapacz, managing director of Spot On Portable Buildings Pty Ltd, said: “This new policy brings many benefits to property owners wanting a sound investment.
“Granny flats generate the most extraordinary figures when it comes to return on investment.
“No matter what the area or what size the granny flat, the figures range from 15 per cent to 25 per cent return on investment.
“To all property owners considering this investment strategy, it is advisable to act now and benefit from these changes while they are still in place.”
Prices for a fully self contained one bedroom granny flat start at $23,400.
According to Mr. Tarapacz, your granny flat will:
- Pay for itself in 4-6 years
- Provide a steady income once paid off
- Make money by using unused yard space
- Increase property value
- Maximise rent return
- Be council approved in 30 days
- Provide a long term investment