Want to know how rising building costs have affected granny flat prices?
It’s no secret that the cost of construction has spiked dramatically in the last 6-12 months.
The average cost to build a new house has reportedly risen by more than $76,000 since April 2021.
But those hoping for new home prices to return to normal in a year or two are being told to think again.
Funky Little Shack analyses how industry changes are affecting granny flat prices – and how best to build a luxury small home for yourself or loved ones in 2022.
Why Have Construction Costs Risen So Much?
It’s a question we’re asked all the time.
There are three reported main reasons why Australian construction costs have reached this level:
- Massive local demand for new homes after record low interest rates.
- COVID-19 restrictions on the global supply chain, most notably exports from China.
- Ukraine war sparking suppliers to stop buying “conflict timber” from Russia & Belarus.
Materials make up around 50% of the total cost to build a home, with prices spiking considerably across just about all suppliers.
The biggest price rises have been seen in steel beams and reinforcing steel, structural timber, electrical cable, plywood & boards, and both plastic and copper fittings and pipes.
And while not as substantial, labour costs have also risen…
Bricklaying saw the biggest increase, followed by painting and carpentry.
Are Prices Going To Keep Going Up?
If you are waiting for construction costs to fall back to previous levels, experts are warning it will likely never happen.
We’re being told these new building prices are here to stay – but thankfully there is some good news.
The rate of further price rises is set to slow down considerably.
This means it should be easier for builders to offer certainty on what your new home is going to cost you.
It’s fantastic to hear that we shouldn’t expect to see another period like the past 12 months anytime soon.
At the end of the day, you want confidence that your dream home ideas are possible, and you’re being taken care of by the right people.
What Does This Mean For Granny Flat Prices?
Demand for secondary housing – like granny flats – is still incredibly high.
COVID has changed our way of life, with more families than ever turning to personalised small homes to house their parents, children or family.
Two to three years ago it was common to see luxury high-end granny flats being built for around $140-200,000.
In 2022, depending on design and location, a standard 50-60m2 granny flat is more often built for $200,000+. Meanwhile, 80-90m2 designs are being built closer to $300,000.
Prices are also commonly higher for granny flats on high stumps, or that require substantial earthworks, retaining walls, and additional infrastructure.
While there are some cheaper options on the market, including retrofitted shipping containers and factory built tiny homes, these simply won’t cut it for some property owners.
If increasing property value with a high-quality design is essential to you, or ensuring your loved ones to live in a home perfectly designed to suit their needs is important, our personalised luxury designs are still the best way to go.
In addition, it remains extremely difficult to secure a home loan for a kit or modular home. Banks still look much more favourably on designs that are made to be traditionally built onsite.
So What Can You Do To Minimise Cost?
As designers that specialise in fully-customised granny flat designs, we are always looking for creative ways to make your dream small home a reality.
While these new costs to build can’t be fully avoided, here are several ideas to help keep costs down:
- Find the flattest part of your property to build to avoid extra costs on cut & fill work or tall piers.
- Look to use a flat or skillion roof design when possible. Gable or higher roofs tend to be more expensive.
- Stick to one bathroom. Bathrooms are the most expensive rooms to build in a home, adding around $20-25k each.
- Avoid two-storey, loft-style or split-level designs. More height means more material, structural bracing, and scaffolding costs.
- If it makes sense for your property, consider a concrete slab over small stumps. We suggest seeking advice from a builder before making this decision.
Talk to us about the best ways to design your granny flat! Contact us here.
It’s all about finding the perfect balance between a design that will be economical, and a personalised layout and style that is going to ensure you add massive value to your property.
When it comes to families looking to support their loved ones, now is the best time for the foreseeable future to start the design process.
Funky Little Shack provides personalised granny flat designs tailored to your wants, needs and property.
Our designs make the most of your available space – destroying the stereotype of the “ugly granny flat”.
Contact us to book your free consultation with our design team, or ask any questions about our process.
We’d love to help you and your family. If you want to learn more about what Funky Little Shack can do for you, get in touch today.