Angus Raine, Executive Chairman of Raine & Horne, has thrown his support behind an innovative proposal that highlights the substantial benefits of backyard granny flats.
“In a climate where Australia grapples with housing and rental shortages and real estate affordability, these modest dwellings can be a viable and timely solution,” Mr Raine said.
“They can also serve as an extra source of income for cash-strapped homeowners who are wrestling with the multiple challenges posed by rising interest rates and the cost-of-living crisis, driven by escalating petrol and electricity prices.”
According to a report by CoreLogic, there is potential for up to 655,000 granny flats to be constructed throughout Australia, offering a potential solution to the pressing issues of housing shortages*.
Immediate action needed to address the escalating housing crisis
This pressing housing crisis necessitates prompt and efficient solutions, said Mr Raine. “There is a narrow window of opportunity to discover enduring answers, particularly when we have a clear solution right before us in the form of granny flats.
To improve the financial feasibility of the granny flat proposal, Mr Raine encourages governments to consider offering subsidies as enticements for homeowners to integrate granny flats into their properties.
"This could entail making the income generated from granny flats tax-exempt for a period of 5 to 10 years," he suggested.
"I'd like to strongly encourage state governments and local councils to streamline bureaucratic processes and regulations concerning what constitutes a fully contained granny flat.
“In certain regions, there may be restrictions on approving kitchens within granny flats, forcing tenants to seek alternative cooking arrangements, thereby compromising these living spaces."
Mr Raine also recommends consulting with financial specialists, such as "Our Broker," who possess a wealth of experience in financing granny flats. “A broker can offer expert counsel and assist in navigating the entire financing process for a granny flat, which may encompass refinancing a home loan, accessing your savings, or utilising money in a mortgage offset account.”
Mr Raine firmly believes that an increase in the number of granny flats also has the potential to augment property sales and homeowner cashflow.
“Given the current backdrop of soaring interest rates, escalating petrol and electricity costs, the supplementary income generated from granny flats—usually amounting to several hundred dollars per week and more—holds significant practical value.
“Better still, homeowners can harness the potential to generate an alternative income stream through the construction of granny flats, while also bypassing the protracted approval processes typically associated with home extensions or additions.”
He continues, “While it's challenging to precisely quantify the added value that a granny flat can bring to a property, when selling, it can notably enhance the appeal of the property and expedite the sales process.”
Furthermore, Mr Raine underscores that the benefits of granny flats extend beyond investment opportunities.
“These versatile spaces can be used to house older children, accommodate elderly parents, or serve as a home office,” he said.
Mr Raine emphasises the urgency of addressing the housing crisis and supports granny flats as a practical and timely solution.
“By adopting prefabricated building solutions, it’s possible to significantly expedite the construction process of granny flats, potentially reducing building times significantly.”
Pictured: 6 Yaringa Road, Castle Hill, NSW 2154