A Complete Guide To Pricing & Financing
Building a granny flat is a smart investment – whether you’re creating additional living space for family, boosting your property’s value, or generating rental income. One of the most common questions we hear is: “How much does a granny flat cost?” or “How much do granny flats cost to build?”
The answer isn’t always simple. The cost of building a granny flat depends on several factors, from the size and design to inclusions, site conditions, and council requirements. In this guide, we’ll break down granny flat pricing, explain what impacts costs, and explore financing options to help make your project achievable.
At P J Cook Building, we take pride in providing upfront pricing, so there are no hidden fees or surprises after signing our building contracts. Unfortunately, this level of transparency isn’t always standard across the industry.
That’s why we’ve developed this essential guide to granny flat pricing—to help you make an informed decision about the granny flat cost on the Central Coast, in Newcastle, and throughout the Hunter Valley. Our goal is to ensure you find a builder who delivers both real value for money and the high-quality finish you deserve.
One thing is certain: choosing the right granny flat builder is priceless!
Here are some key points to consider while researching Granny Flats:
WHAT IS THE AVERAGE COST OF A GRANNY FLAT?
On the Central Coast and in Newcastle, the average cost of a granny flat typically ranges between $170,000 – $450,000+. The final price depends on your chosen design, finishes, and site preparation requirements.
Smaller, basic designs fall at the lower end of the range, while larger, two-storey and custom layouts with high-end inclusions sit at the higher end. If you’re wondering about the cost to build a granny flat in NSW, these figures provide a reliable starting point.
FACTORS THAT AFFECT GRANNY FLAT COSTS
When asking “how much do granny flats cost to build?”, it’s important to understand what influences the price. Key factors include:
Size & Layout – A one-bedroom granny flat will generally cost less than a two– or three-bedroom option. Adding a second storey will increase the cost.
Design & Inclusions – Custom features, premium finishes, alfresco areas, and extra storage all increase cost.
Site Conditions – Sloping blocks, difficult access, or rock excavation add to the build cost.
Council & Compliance – Local council fees, bushfire/flood reports, and service connections affect pricing.
Car Spaces & Outdoor Living – Adding a garage, carport, deck, or verandah will increase the investment.
THERE ARE DIFFERENT TYPES OF GRANNY FLATS
There is a big difference between a modular or transportable kit home and a custom-built granny flat. Kit home prices often do not include essential inclusions such as site costs, council fees, electrical, gas, water, plumbing, carpets, blinds and other important finishing touches.
However, the primary difference lies in the quality of the finished build. A custom-built granny flat is built on-site to suit your block of land and surroundings, and it will also have more design and personalisation options. All P J Cook granny flats are like mini versions of new homes and custom-built on-site.
P J COOK GRANNY FLAT PRICE RANGES
At P J Cook Building, we offer a range of proven granny flat designs to suit different budgets and lifestyles:
We have seen prices offered around $70,000.00 for a 60m2 / 2-bedroom granny flat, which is not realistic if all costs are considered. In our experience, most volume builders buy materials around the same rate – if you have prices varying any more than 1%, it is more than likely that the cheaper quotes are missing heaps of hidden costs and fees that emerge down the line – don’t fall for it!
BE WARY OF VERY LOW PRICES
Even if you are only comparing the pricing of custom-built granny flat builders, be wary of low prices. While the lure of a lower initial price tag sounds appealing, some builders will lock you in before hitting you with unexpected costs throughout your building journey. As the saying goes, if an offer seems too good to be true, it probably is.
Be wary of builders who vaguely draft proposals. It may appear as though all the necessary inclusions are covered; however, if you read the proposal and terms carefully, several essential items that should be included will be missing. Some builders subsequently offer these inclusions as ‘free’ promotional offers with a short deadline to entice you to sign up with them quickly – don’t fall for it, as these costs will undoubtedly emerge further down the line, likely within your final building contract proposal.
Unfortunately, by this stage, you have already committed and invested a significant amount of money and time in the initial design. You will likely feel that it is not worth starting the entire process again with another builder. Generally, builders own the copyright of the design and do not offer licence fees or allow clients to use the design with another building firm, so you would have to start the entire process again.
Take care and compare quotes carefully, as this practice is common within the industry.
COMPARING APPLES WITH APPLES
We understand the difficulties in comparing quotes without experience or industry knowledge. On the surface, inclusions might look similar, but they could be vaguely drafted and a world apart. That is why we have compiled a list of the most common items that we find our competitors leave out to appear cheaper and may later offer these missing inclusions to you as promotional upgrades to entice you to sign up quickly – the reality is you are not getting these for free, don’t fall for it!
Should you not take the time to complete a ‘Like for Like’ comparison, you risk all these costs being built into your final building contract proposal, which you may not have originally budgeted on. By this stage, you are locked into a contract, so you have no choice but to pay over-inflated prices for ‘extras’ that should have been included in the original estimate.
We are so confident that you will get more value with our standard inclusions that we encourage you to compare our price and inclusions with our competitors. It is vital to complete ‘Like for Like’ comparisons to ensure all inclusions are included and are of the same/similar quality so you can budget for the ‘Total Project Cost’.
FAQs
Absolutely. Granny flats can boost your property’s value when it comes time to sell. Families see the benefit of extra space for a teenager or older family member, while investors recognise the opportunity for dual income.
If you are considering a granny flat, we recommend building it to a high standard. Poor workmanship could have the opposite effect on your property value. A skilled builder will design a granny flat that complements your existing home. Choosing a trusted builder like P J Cook Building ensures a durable, well-designed granny flat that enhances both your lifestyle and the long-term capital value of your property.
Yes — a high-quality granny flat can add significant value to your property and provide a steady income stream through rental returns.
Most granny flats are built slab on ground because it’s the more cost-effective option. However, if your block is in a flood-affected area or on sloping land, building on piers may be necessary and can be more practical. The decision ultimately depends on your site conditions, slope, and access.
On the Central Coast and in Newcastle, the average cost of a granny flat typically ranges between $170,000 – $450,000+. The final price depends on your chosen design, finishes, and site preparation requirements.
EXAMPLE CASE STUDY OF THE FINANCIAL BENEFITS OF BUILDING A GRANNY FLAT
John, a savvy investor who lives in a four-bedroom home on a 680-square-metre block in Ettalong Beach on the Central Coast, has a large backyard with space he does not use but has to maintain.
John adds a 2-bedroom granny flat. He spends a total of $260,000.00 (including design/approval/council fees), which includes design, approvals, and all our standard lifestyle inclusions, and is ready to move in. As this property is located in Ettalong Beach, close to a lovely beach and numerous shops, John can rent the two-bedroom Granny Flat for $550 per week.
Under this scenario, the granny flat generates an annual return of around 10%. John can pay off the cost of his investment in approximately 10.156 years, after which he will enjoy an annual income stream of almost $25,600.
Of course, this is just one example; you must consider your circumstances. For example, you may need to borrow money to fund the investment in a granny flat on your property. You may need to budget for landscaping, fencing, Section 94 council contributions, and other related expenses. Other expenses will mean it takes longer for your investment to generate positive cash flow. Contact the P J Cook team to learn more about potential returns on your granny flat.
HOW EASY IS IT TO GET FINANCE FOR A GRANNY FLAT?
A lender will generally consider your income and expenses as well as your access to savings, self-managed super, assets or equity in other properties. They will also look at your history and credit rating. If the granny flat is being built as an investment property, the lender may consider the future rental income in your favour.
EQUITY OPTION
If you already have equity in your primary home (i.e. it is worth more than you owe the lender), you may be able to draw on that to finance the build, sometimes up to 100% of the value of the granny flat. A property valuation will be necessary to establish the available equity. A top-up loan with the same lender will not require a new loan application, so this is often the easiest route. You could also consider a line of credit, but those loans have higher interest rates.
CONSTRUCTION LOAN
If you do not have enough equity in your primary home, our broker can help you organise a construction loan. The lender will consider the finished value of the granny flat and the value of your existing home. Construction loans are released to the builder in stages.
We have briefly listed the stages below that most banks generally approve:
SINGLE-STOREY SLAB ON GROUND
- 7.5%. Building Deposit
- 12.5%. Following Completion of Main Excavations, Retaining Walls, Plumbers’ Internal Drainage and Slab Pour
- 15%. Following Completion of Wall, Roof Framing, Fascia, Gutter, and Roofing
- 15%. Following Completion of Installing Windows, Door Frames, Cladding and or Brickwork, Plumbing, Electrical and AC Rough Ins
- 15%. Following Completion of Insulation, Plasterboard Linings, Waterproofing and Floor Tiling
- 15%. Following Completion of Fix Out, Wall Tiling, Kitchen, Vanity, and Laundry Joinery
- 15%. Following Completion of Stone Bench Tops, Plumbing Fit Off Including Tapware, AC Fit Off, Electrical Fit Off Including Power Points and Lighting
- 5%. Practical Completion
BEARER AND JOIST
- 7.5%. Building Deposit
- 12.5%. Following Completion of Main Excavations, Retaining Walls, Plumbers’ Internal Drainage, Slab and Footings Poured
- 15%. Following Completion of Uni Piers, Timber Floor System, Wall, Roof Framing, Fascia, Gutter, and Roofing
- 15%. Following Completion of Installing Windows, Door Frames, Cladding and or Brickwork, Plumbing, Electrical and AC Rough Ins
- 15%. Following Completion of Insulation, Plasterboard Linings, Waterproofing and Floor Tiling
- 15%. Following Completion of Fix Out, Wall Tiling, Kitchen, Vanity, and Laundry Joinery
- 15%. Following Completion of Stone Bench Tops, Plumbing Fit Off Including Tapware, AC Fit Off, Electrical Fit Off Including Power Points and Lighting
- 5%. Practical Completion
TWO-STOREY SLAB ON GROUND
- 7.5%. Building Deposit
- 12.5%. Following Completion of Main Excavations, Retaining Walls, Plumbers’ Internal Drainage and Slab Pour
- 7.5%. Following Completion of Ground Floor Wall, Roof Framing, Steel Beams/Posts
- 7.5%. Following Completion of First Floor Timber Floor System, Wall, Roof Framing, Fascia, Gutter, and Roofing
- 15%. Following Completion of Installing Windows, Door Frames, Cladding and or Brickwork, Plumbing, Electrical and AC Rough Ins
- 15%. Following Completion of Insulation, Plasterboard Linings, Waterproofing and Floor Tiling
- 15%. Following Completion of Fix Out, Wall Tiling, Kitchen, Vanity, and Laundry Joinery
- 15%. Following Completion of Stone Bench Tops, Plumbing Fit Off Including Tapware, AC Fit Off, Electrical Fit Off Including Power Points and Lighting
- 5%. Practical Completion
During construction, you can enjoy interest-only repayments, with the capital repayments added on completion.
HOW MUCH IS YOUR TIME WORTH?
Our standard inclusions include design services, management of the approval process and working closely with the council, private certifiers and other consultants until your project is approved. P J Cook saves you time and eases the stress associated with getting your building approved. How much is that worth to you?
THE RIGHT DECISION IS PRICELESS
It isn’t easy to put a dollar value on dealing with a reputable local family building company that has served its customers with integrity and distinction for many years. One thing is for sure – you will soon realise the value if you make a poor choice. Come and inspect one of our completed projects and speak to recent clients who have built with us; you will feel confident to partner with us in this journey.
Are you ready to explore the opportunity for a high-quality granny flat addition to your property?
For personalised advice, simply call us on (02) 4342 0853.
