Granny flats were once considered a golden opportunity for homeowners and investors in Logan to rent out for profit, but an increased infrastructure fee of $16,992 has sapped some of the incentive.
The fee for auxiliary dwellings – the umbrella term encompassing granny flats – once sat at around $10,000.
Vision Granny Flats director Sonia Woolley said the increased fee is making it less affordable, coupled with the rising cost of building materials.
“I believe it’s got to the point where it’s possibly not [affordable],” she said.
“That’s a lot of money to add onto a project that can greatly increase an investor’s rent return on their property,” Ms Woolley said.
Logan residents are in the unique position, which not all councils allow, where they can build a granny flat for less than $150,000 and rent it out on a separate lease.
Until the fee change, homeowners and investors could have made a decent weekly return from rent, but that will now take longer to achieve with the fee increase.
Council increased the infrastructure fee in April to stop property spruikers and wealth creation groups developing poorly designed estates for a quick buck.
In April, Cr Jon Raven said it was to stop dwellings with “no regard for the surrounding community and infrastructure”.
Approvals for auxiliary dwellings increased from 326 by the end of 2016, to 846 by 2018, and 646 the following year.
Ms Woolley understands why council wants to limit the rapid rise of mass-produced estates, which are jampacked with poor quality homes and detached granny flats.
“We’re all a bit surprised how new estates developed along those lines, so this [fee increase] is just one of the ways council has tried combatting what’s resulted in the last few years,” she said.
She recommends people thoroughly look at the short- and long-term financial benefits and negatives before embarking on a granny flat build.
“Look at the numbers at the end of it and look at the highest and best use of that property, I still believe it is building a granny flat there in terms of value for your dollar,” she said.
Browns Plains Real Estate agent Neil Giles is seeing a strong interest in people wanting granny flats.
“That’s the big thing everyone is looking at, especially investors who’ve been in the area a little while and bought well,” he said.
“For another $150,000, they can put a granny flat in the backyard and start earning $300 a week from the granny flat as well as the house, so it makes it a very viable proposition in the area.”
However, he said the option suits current homeowners better than people looking at buying into the market with the intention of building a granny flat because property costs are higher than usual.
“It’s a bit expensive to do it now because you’ve got to pay top dollar on your existing house on the block of land, but for people who have held it a little while, that seems to be the way to go.”
