Building a Granny Flat in Melbourne: Tips and Things to Know

A granny flat is a self-contained living area that is built on an existing property as a separate dwelling from the primary residence. It is usually intended for elderly relatives who require assistance but still want to maintain a certain level of independence, hence the name “granny flat”. In this guide, you will learn all about building a granny flat in Melbourne, including state regulations, building tips, costs and options available.

State regulations

Different states in Australia have different regulations regarding granny flats. But in Melbourne, you don’t need a planning permit if it is intended to be a Dependent Person’s Unit (DPU) or, in other words, the dwelling of a person who is dependent on the residents of the main house on the property. A DPU cannot be the main residence on the property. It can have its own kitchen and bathroom, but it can only have one floor. When the dependent stops using the unit, the owners of the property cannot rent out the DPU and will in most cases be asked to remove or repurpose the space.

Building tips

When building a granny flat, there are a few basic things that you need to keep in mind. These include but are not limited to space, storage and customizations.

  1. Space

A granny flat can take up a large amount of space on your property, so take your time to decide where exactly you want it to be. It shouldn’t block driveways or passageways to the main house. It is also suggested that there should be enough space between the main residence and the DPU, to maintain the privacy and independence for both homes.

  1. Storage

A granny flat has a limited amount of floor space due to their size. Therefore, when designing your granny flat, remember to think of creative storage solutions such as under-the-bed storage and furniture pieces that double as containers.

  1. Customizations

You might also need to make customizations for the person/s living in the granny flat. If they are elderly, they might need space and ramps for wheelchairs.


To put the cost in context, Melbourne kit homes on average can cost as low as $10,000, without the cost of hookups and installation. In total, the construction of a granny flat costs around $40,000 on average. Meanwhile, custom granny flats usually cost at least $120,000.


Now let’s talk about options. You have several considerations that you need to think about before you start building a granny flat.

  1. DIY vs Contractor

Will you build the unit by yourself or hire a contractor? In most cases, this is an easy decision to make based off your own building expertise and how quickly you need the house made. A simple search for “granny flats Melbourne” can usually provide you with the best option for finding an effective and reliable contractor.

  1. Permanent vs Transportable

You can also choose between permanent or transportable granny flats. Transportable granny flats usually come in modular units, that are then built on your property. They are therefore, faster to build. They are also usually cheaper, but they don’t allow for a lot of customizations. On the other hand, you will most likely need to build a foundation for a permanent granny flat on your property. Permanent granny flats are more customizable, but they are on average more expensive.

Are you ready to build your own granny flat? Hopefully, this guide has helped you to better understand the process of constructing a granny flat in Melbourne.

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