Record number of Granny Flats Approved in Sydney and Rural New South Wales

Feb. 28, 2013 - PRLog -- New South Wales, Australia -- Local Councils and Certifiers are being inundated with new applications for granny flats in NSW. One Sydney Council reports receiving thirty applications per month, and the number is set to rise. So what is the reason for this new trend? It depends on who you speak to, with the answers ranging from a lack of rental accomodation to investment and personal  tax benefits.

In 2009, the NSW Departent of Planning released new legislation which allows granny flats (or  secondary dwellings)  to be erected on the average Sydney back yard. Prior to 2009, it was virtually impossible to have a second house approved on your residential property. Whilst the initial uptake was slow, mainly due to a lack of public knowledge, the news has since spread far and wide.

Serge Panayi, from Granny Flat Approvals, reports that he's also approving granny flats in rural centres such as Newcastle, Bathurst and Wagga Wagga. The building industry is buzzing with the term 'granny flats' as home-owners and property investors look away from building new houses and toward granny flats.

We asked Serge why granny flats are becoming so popular.

"Since 2009 the trend seems to have shifted from existing home-owners looking for a way to make some extra cash to investors specifically targetting and hunting down granny flat friendly properties ".

We asked him if there are any particular areas being targetted by his clients. He reports that the majority of new granny flats are being built in Sydney's western suburbs, such as Blacktown and Penrith. Next to that is the south western district of Campbelltown. He sites low-cost housing in these areas and larger, easier to develop blocks as the primary reasons.

The number of building companies focusing on granny flats is also on the rise, as builders realise the relative simplicity and new opportunities in this new niche within the building industry.  We lso asked Serge if there's any sign of slowing down.

"The trend has been not only being increasing but it's accelerating. In 2009 we completed 25 granny flat approvals. In 2012 it went up to 87. We expect to do more than 120 granny flats between January 2013 to the same time next year."


The planning laws for granny flats are universal in NSW, which means no matter where you live, Bondi or Quirindi, you can bypass the Local Council legislation and go straight to your own Private Certifier for approval. This can be achieved in just 10 days. We asked Serge Panayi why Private Certifiers are receiving most of the development applications.

"Private Certifiers are generally cheaper and much easier to deal with. It's the difference between having a commercially interested party dealing with your paperwork versus a Government body. The Certifier has a vested interest in our granny flat approvals. My Private Certifier knows my builders so there's a familiarity and trust which is hard to find at your Local Council".

The only issue with granny flats is that some Local Councils are beggining to react by charging hefty 'Section-94 Contribution Levies". These are fees usually charged for new multi-storey or group-home developments. Some Council's have waived the fee but others have bitten back quite hard with fees in the tens of thousands of dollars imposed on granny flats. The State Government and Department of Planning have expressed concern, as these fees can constitute ten to fifteen percent of the building and approval costs.

Despite this, granny flat developments are not only going ahead across the state, but the uptake is accelerating, as reported by Serge Panayi from Granny Flat Approvals (NSW) Pty Ltd. The advantages which granny flats have over new housing includes:

1. No stamp duties are payable on granny flats

2. No subdivision or Title change Fees

3. Usually no Mortgage Insurance is needed, as long as you can show 20% equity

4. Building on an established property means the services (sewer, water, electricity) are close by and easy to connect to

5. Building costs are becoming cheaper as more builders advertise cheaper granny flat options

It remains to be seen if granny flats will continue to be a popular choice for home owners in Sydney and rural NSW. With other Australian states now looking at permitting granny flats for investment perposes, it certainly looks like granny flats are here to stay.

Photo:
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