Granny flat demand skyrockets in WA’s relentless rent crisis

The number of people seeking to build and rent granny flats in Western Australia has skyrocketed, after it was announced laws around their construction would be relaxed.

Builders Summit Homes Group recorded more than 3000 new visitors to the granny flats section of their website in the week following the announcement the laws were changing – a 125 per cent increase on usual numbers.

Inquiries have also drastically increased.

Homeowners will soon be able to build a granny flat in their backyard up to 70 square metres without battling lengthy council approvals, as long as it meets setback requirements.

Summit Homes granny flats general manager Adrian Sutton said the option could be perfect to accommodate a family member such as an older parent or young person who needed more space but did not have the capacity to compete in a tough market.

“It also presents a great short or long-term rental investment opportunity, and maximises the potential of your backyard, adding value to your property,” he said.

“It is a smart and cost-effective way to expand.”

He said building the granny flats could help reduce the housing crisis, as they could be constructed considerably quicker than a traditional home, although in recent times the usual three-month turnaround had doubled to six.

The rental vacancy rate has lifted marginally to 0.4 per cent, but this was from a low of 0.3 per cent reached in November, which had been the lowest rentals had gone in more than 40 years.

One website, GrannyFlat Rental, was set up in 2020 to bring back a sense of community during pandemic lockdowns, initially mostly catering for NSW residents.

Founder Lisa de Ruyter said it had since expanded, with growing demand in Perth.

She said the ideal vacancy rate in a stable market would be between 2.5 and 3.5 per cent.

“I would say the number of people inquiring over granny flats through our website has doubled in the past year,” she said.

“There is a real need for them, particularly in WA given the low vacancy rates.”

Rental prices for granny flats have increased with demand along with rents everywhere else, and de Ruyter said they were often rented out within one to two days of being listed.

In 2020, WA listings on the rental website averaged at $200-$300 per week but have since doubled to $400-$600.

Recently, a one-bedroom granny flat was leased for $520 per week in East Perth and another property, that initially leased for $470 per week in September 2022, was listed for $550 per week a year later.

But de Ruyter said the website had a section that allowed for reduced rent, if the space was taken by someone like a carer, cleaner or nanny who would be working at the premises.

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