Perth is grappling with a severe housing shortage, fuelled by robust population growth and a construction sector struggling to keep pace with demand. For homeowners, this challenging market presents a unique investment opportunity: building a granny flat on their existing property.
An ancillary dwelling is a powerful way to increase housing supply while generating a strong rental return, especially with current rental vacancy rates and housing stock levels at record lows.
A Family's Smart Investment
Eddie and Jane Vahldieck from Cloverdale are a prime example. When their adult son returned from travelling and wanted to settle down with his partner, they saw a chance to transform their underutilised backyard. Their 847sqm R20/R40 zoned block, which previously housed an old shed, was the perfect canvas.
"Building a granny flat has definitely been the right thing to do – not just for my son but also for our family’s future," Mr Vahldieck said.
The new dwelling gave their son independence while keeping him close to family. The design prioritised lifestyle, carefully positioned to capture parkland views, morning sun, and the sounds of local birds, while ensuring privacy for both households.
"When we thought about the cost, we never saw it as an expense," Mr Vahldieck explained. "It’s adding an asset to the place and really enhancing the value of the property."
The investment has paid off handsomely, with rental interest reaching as high as $720 per week and a significant boost to their overall property value.
Unlocking Your Property's Potential
According to Adrian Sutton, Sales and Operations Manager at Summit Homes Granny Flats, using your own land is an excellent housing solution with multiple uses.
"These include multi-generational living, a studio or an office space, a teenager’s retreat or even Airbnb-style accommodation," Mr Sutton said.
Recent changes to the R Codes have removed the minimum lot size requirement for a granny flat, opening up options for many more homeowners. This means a granny flat can be incorporated into duplex, triplex, or other grouped developments, subject only to site coverage and setback rules.
"About 50 per cent of our clients are investors looking to generate a rental income and the rest are looking to house family members – be it a relative, parents or a child," Mr Sutton noted, highlighting a trend where parents build flats to help children enter the challenging property market.
A Fast-Track to Rental Returns
Speed to market is a critical advantage. Summit Homes Granny Flats has refined its construction process to deliver fully framed granny flats in as little as six months, allowing clients to start earning rental income much sooner.
"We offer clients the option of using fully framed construction with TRUECORE steel and MasterWall instead of traditional double brick to give us that 50 per cent reduction to the build timeframe," Mr Sutton explained. Traditional double brick remains an option for clients who prefer it.
The company builds granny flats from as small as 50sqm, with the majority being a comfortable 70sqm. Despite their smaller size, they are built to the same quality and finish as larger homes, using the same fixtures and appliances.
With a popular model costing around $250,000 and achieving a rental yield of approximately $550 per week depending on location, the financial case is compelling. Adding fencing for privacy and a separate driveway or carport creates a self-contained dwelling that is highly attractive in today's tight rental market.
For those looking to leverage their equity and take control of an investment right in their own backyard, a granny flat from a trusted local builder like Summit Homes represents a smart and timely solution to Perth's housing crisis.
