How Much Does a Granny Flat Cost to Build in 2025?

Well – it depends.

A granny flat can be a versatile, affordable option to create an extra living space for a family member, a private home office for work, or standalone unit to help boost your property’s value. However, it’s important to understand the costs involved to plan your project effectively. This guide will break down everything you need to know, from cost factors to government regulations, before you build a granny flat in 2025.

What is a Granny Flat?

A granny flat is a self-contained secondary dwelling built on the same property as your main house. These versatile spaces have evolved beyond their traditional role as accommodation for elderly parents. Today, they serve as rental units, home offices, guest houses, or teenage retreats, offering flexible living solutions for Victorian homeowners.

Average Granny Flat Costs in 2025

The cost of building a granny flat in Melbourne varies significantly based on size and specifications. Here’s what you can expect to pay in 2025:

Sleepouts & Bungalows (20-30m²): $50,000 – $80,000

These space-efficient options are perfect for home offices, storage solutions, or compact living spaces. Their smaller footprint makes them an excellent entry point for property owners looking to add extra functionality to their homes, and include both single-room setups and options with ensuites.

Small (30-45m²): $80,000 – $130,000

These compact designs maximise space efficiency without compromising on comfort, and are perfect for a studio or one bedroom setup. Options in this range include small, one-bedroom units like the popular 9m x 5m Granny Flat, and our new Noble Park model.

Mid-range (45-65m²): $130,000 – $160,000

Ideal for one to two-bedroom layouts, offering more living space and additional amenities. Elpor has a wide range of mid-sized options, including our Frankston model, and our 11.4m x 5.0m with Study.

Large (65-80m²): $160,000 – $220,000+

These high-end granny flats maximise on comfort, with spacious living areas and premium amenities. Look into options like our Somerville model, and our 11.4m x 6.0m Two Bedroom unit.

In most cases, the square meterage of your granny flat is the primary cost driver. Larger spaces require more materials and labour, directly impacting the final price. However, clever design can help optimise smaller spaces to feel more spacious while keeping costs down.

Other Factors that Influence Granny Flat Costs

Location and Council Considerations

The location of your granny flat within Victoria plays a crucial role in determining its final cost, and local councils and municipalities each have their own approach to granny flat developments. For example, councils in the eastern suburbs such as Boroondara often have strict heritage overlay requirements, while those in growth corridors might focus more on environmental impact. These variations can significantly affect your budget:

• Inner-city councils typically have more stringent neighbourhood character requirements
• Outer suburban areas might require additional bushfire protection measures
• Bayside councils often implement specific height and setback restrictions

Fixtures and Features

At Elpor, we have a range of standard inclusions and upgrade options for all our granny flats, and will work within your budget to find the combination of fixtures and features that best suits your needs.

Sustainability & Energy Efficiency 

Sustainability is an important consideration for modern granny flats, not only for environmental benefits but also for long-term cost savings. Solar panels can reduce electricity bills, while high-performance insulation and double-glazed windows improve temperature control. Water-saving fixtures like low-flow showerheads, dual-flush toilets, and rainwater tanks cut water usage.

Elpor granny flats are designed to meet a 7-star energy rating, ensuring maximum efficiency and reduced energy costs.

Ongoing Maintenance

While the upfront cost of a granny flat is important, ongoing maintenance expenses should also be considered. The choice of materials and finishes impacts long-term upkeep and repair costs.

At Elpor, we use low-maintenance materials like ColorBond steel for cladding, which is durable, weather-resistant, and easy to clean. High-quality decking and double-glazed windows further reduce maintenance needs.

How to Save on your Granny Flat Build

Building a granny flat is a significant investment, but smart planning can help reduce costs without compromising quality. Here are some key ways to save:

• Choose a simple design – Open-plan layouts and single-story structures reduce construction complexity and costs.
• Opt for prefabricated builds – These can be more affordable and quicker to construct.
• Use cost-effective materials – Laminate cabinetry and standard tapware offer durability at a lower price.

By making smart choices, you can build a high-quality granny flat while keeping expenses under control.

Ready to Build?

When planned properly, building a granny flat in 2025 can be a great investment. While costs vary based on numerous factors, understanding these expenses helps you budget effectively and avoid surprises during construction.

At Elpor, the price of our granny flats is all-inclusive, with standard features and appliances, homeowners warranty, utility connection and building permit included in the total price, ensuring there are no sneaky hidden costs to you. Contact us for a tailored consultation, and build your perfect, budget-friendly granny flat today!