Current Real Estate Prices in Canberra and Investment in Granny Flats
While Canberra is still a relatively small city, it has seen significant growth over the last decade. As a result…
Canberra has a booming real estate market offering a safe and secure environment for families to grow and prosper, with a high quality of life and a low crime rate. While Canberra is still a relatively small city, it has seen significant growth over the last decade. As a result, there has been an increased demand for housing as more people move to Canberra from other states or overseas. In addition, there has been an increase in single-person households due to changes in social attitudes towards marriage and family life. This popularity has resulted in a shortage of suitable housing options across the board, which has pushed prices up significantly over recent years. Therefore, more people are looking to invest in granny flats.
Granny flats are an affordable way for first-home buyers to get a foot on the property ladder, and it’s also an excellent option for those looking to rent out their extra properties. While granny flats have been around for years, they are becoming increasingly popular as an investment opportunity. And with good reason: Granny flats can increase your home’s value by 30 percent or more. Suppose you’re thinking about buying or investing in property in Canberra. In that case, you need to know what current market conditions are like to decide what type of property will suit your lifestyle best.
Current Real Estate Prices in Canberra
The average price for a home in Canberra is currently at a record high of $816,644. That’s an increase in real estate prices of 28.8 percent from 2021, comparable to Sydney’s housing property value. The increase has been recorded as one of the highest compared to other cities in Australia. Besides, the growth was realised after the pandemic when unit prices of houses increased by 9.4%, and overall, houses rose by 30.9%. Although property values are increasing, more people cannot afford the high cost of purchasing a home since the cost of housing has surpassed that of wages.
The property values are steadily rising at 15.8% in contrast to wages which have only seen a growth rate of approximately 1.7% annually, highlighting the escalating cost of living problems. Although this growth rate doesn’t come as a surprise compared to the past 30 years, it has increased by 3.6 times more. The typical house price in Australia has soared by roughly $103,400 in the last year (equivalent to around $1,990 weekly). A shortage of housing options in Canberra is one of the main reasons real estate prices are so high and why property prices have been increasing in recent years. Consequently, the property growth is primarily fueled by the detached and semi-detached dwellings known as granny flats which have increased the value of residential properties.
A granny flat is usually a secondary dwelling on the same property. The Territory government has responded by changing legislation allowing for a greater range of dual occupancy housing in multi-unit developments across Canberra. This change is due to the massive demand for granny flats and other dual occupancy homes, increasing attached dwellings by 16.8%.
The new dual occupancy provisions allow a maximum of two dwellings to be built on one site and will mean that in small developments of less than 20 lots, the dual occupancy quota changes from 5 dwellings per block to 10. This will be expected to add an estimated 3,000 new homes per year.
The demand for granny flats has ensured that a housing shortage has been created, which has helped the property market to increase. Dual occupancy homes and granny flats provide families with more choices in their housing arrangements while also generating additional income for property owners through rental payments, which can help fund other housing needs.
If you’re a first home buyer and want to get in on the action, you should apply to an off-the-plan project within the first 12 months of the property being available. This will allow you to lock in one of Canberra’s fast-growing property markets with all its benefits.
Many types of granny flats come in many different shapes and sizes. In this case, most granny flats can only be accessed from the bottom floor and the ground floor of the adjacent building. Some may be a room within a house, some may be detached and single story (like converted attic space), or maybe even two or three stories high.
Factors to Consider When Constructing a Granny Flat
Many factors can affect the value of a granny flat. When it comes to selling properties, these factors should be considered as there’s more room to sway prices upwards. One thing is for sure; Canberra has significantly benefited from granny flats and their positive effects on the property market and economy.
A granny flat should be small enough to allow only one resident, although exceptions may be made if two people are willing to share. There are many ways to construct a granny flat and this can vary greatly depending on the building code and regulations.
Granny flats should be located in areas convenient to other services like schools and close to public transport, which will likely increase their value substantially. However, no single location is ideal for granny flats.
A granny flat can be constructed for a relatively cheap price, which is why it’s often considered an option for first-home buyers and young families. On the other hand, some granny flat’s prices can be relatively high, depending on the location and condition of the property you’ll need to purchase.
Many types of granny flats are available in Canberra, including townhouses, standalone units, and remodeled garages. The construction of a granny flat is relatively simple and quick; most properties are built within a few months.
The property’s condition should be considered as it affects its value. If you’re buying a property with a granny flat included, it’s essential to check the state of the granny flat to ensure that it’s habitable.
Getting Approval for the Construction of a Granny Flat
Building a granny flat is a relatively simple process as long as you have the space available on your property. To be approved for a granny flat, you will need to own both the dwelling that the granny flat is being built on top of and the land that the granny flat is built on. To build a granny flat, you will need to apply for an approval with your local council where you live.
The types of granny flats that are allowed will depend on the zoning of your land. If you own a vacant lot or residential block, then you’ll likely be able to build a granny flat on it. However, the rules may be different if you’re building a granny flat on top of an existing house. You may need to apply for what’s known as a “Change of Use” permit. This will allow you to convert an existing house into a granny flat.
Benefits of a Granny Flat
For property owners, granny flats are a profitable way to increase one’s property value. The return on investment for granny flats is much higher than for other residential investment forms. This is because the construction of granny flats does not cost the same amount as building a standalone house from scratch. A granny flat can be built relatively quickly. In fact, private first-home buyers who choose a granny flat as their first property often do so in just a few months, significantly faster than if they were to build the house themselves –even before the purchase of land and construction costs.
It’s a win-win situation for those wanting to enter the market. Granny flats are cheaper than building a standalone property from scratch, yet substantially more expensive than renting a room in someone else’s house. It also appeals to homeowners with an empty backyard who want extra cash. It is also appealing to investors, as the value of these properties typically increases over time. For real estate agents, it’s an opportunity to widen their client base and earn more commissions. Granny flats are a simple and quick way to make a quick sale, which is why they can be so profitable for real estate agents.
Keep in mind that…
Canberra is one of the fastest-growing cities in Australia. With this growth comes an increase in demand for real estate, which has led to a rise in property prices. There are more potential buyers than ever before looking for affordable property options within Canberra. The granny flat phenomenon is a growing part of the Canberra market, and it’s a trend that’s not likely to slow down any time soon.
Granny flats offer many benefits, including extra income and the opportunity to help out friends and family looking for affordable housing. Granny flats are also good investments as they increase a residential property’s value and can be sold off later for a profit. However, one must not rush into building a granny flat. Before developing one, it would be best to consider the factors that affect the granny flat’s value and potential profitability.
This information is general in nature, consult your accountant and financial planner when making financial decisions.