How much does a granny flat cost in Melbourne?
A granny flat in Melbourne costs $105,000–$152,000 for a turnkey 1-bedroom build (35–45m²), $133,000–$200,000 for a 2-bedroom (around 60m²), and from about $76,000 supplied for a prefab or kit unit. Per square metre, turnkey builds run $2,200–$3,350/sqm depending on design, site, and finishes.
Detailed Pricing — Melbourne 2026
| Service | Low | Typical | High |
|---|---|---|---|
| Prefab / kit granny flat — 1-bed (supplied) | $76,000total | $90,000 | $114,000 |
| Studio / 1-bed granny flat (35-45m², turnkey) | $105,000total | $124,000 | $152,000 |
| 2-bed granny flat (~60m², turnkey) | $133,000total | $166,000 | $200,000 |
| Custom / premium 2-bed (high-end finishes) | $200,000total | $247,000 | $304,000 |
| Two-storey or with attached garage | $266,000total | $328,000 | $404,000 |
| Garage / outbuilding conversion | $38,000total | $71,000 | $114,000 |
| Turnkey build (per m² built) | $2,200/sqm | $2,650 | $3,350 |
| Site works + service connections | $14,000total | $24,000 | $38,000 |
| Building permit (small second dwelling) | $3,000total | $6,000 | $11,000 |
| Demolition / site clearing (if needed) | $3,000total | $6,000 | $14,000 |
| Driveway, path & basic landscaping | $5,000total | $10,000 | $19,000 |
| Privacy fencing (per m) | $140/m | $210 | $290 |
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Get Melbourne quotes →Prices include GST. Based on Melbourne metro area, Mar 2026. Outer suburbs may vary.
Melbourne’s Granny Flat Market in 2026
Melbourne has one of Australia’s busiest granny flat markets. High property prices, multi-generational living, and strong rental demand make a secondary dwelling one of the higher-return additions a Melbourne homeowner can make — a 2-bedroom granny flat rents well and can lift property value by 10–30%. Victoria’s 2023 reforms made small second dwellings far easier to build, and Melbourne’s land values make a backyard build one of the better ways to add a rentable dwelling without buying more land.
The biggest swing in price is build method. Prefab and modular units (from about $76,000 supplied) are the budget end; standard site-built 1- and 2-bedroom homes ($105,000–$200,000 turnkey) are the mainstream; and custom or two-storey builds run $200,000–$404,000+. Site works and service connections ($14,000–$38,000) and approvals are the costs homeowners most often underestimate.
On the rules: In Victoria a small second dwelling up to 60m² can often be built without a planning permit (subject to overlays), though a building permit is still required and it cannot connect to reticulated natural gas. Build method and finishes are the main price drivers, with site works and a building permit on top.
We’ve compiled pricing from Melbourne granny flat builders, prefab suppliers, and trade databases to give the most accurate picture of granny flat costs in Melbourne for 2026.
How Granny Flat Costs Vary Across Melbourne
Inner & Northern Suburbs
Typical cost: $152k–$285k turnkey
Carlton, Fitzroy, Brunswick, Northcote, Preston. Narrow inner blocks and tight rear access push site-works and craneage costs up, and heritage overlays can limit a second dwelling’s height and siting. Where they fit, high land values make the rental return strong.
Bayside & Inner South
Typical cost: $171k–$314k turnkey
Brighton, Sandringham, Hampton, Elwood, Caulfield. Premium land and finishes. Detached 2-bed builds with quality fit-outs are common; budgets often run to the top of the range to match the main house.
Eastern Suburbs
Typical cost: $143k–$266k turnkey
Box Hill, Glen Waverley, Doncaster, Ringwood, Camberwell. Large family blocks with good access make for straightforward detached builds. Popular for housing teens, parents, or a rental in high-demand school zones.
Western Suburbs
Typical cost: $114k–$219k turnkey
Werribee, Point Cook, Sunshine, Footscray, Tarneit. The most affordable area in Melbourne — big, flat estate blocks, easy access and strong builder competition keep turnkey prices down. Among the best rental yields in the city.
South-Eastern & Mornington
Typical cost: $114k–$219k turnkey
Frankston, Dandenong, Berwick, Cranbourne, Mornington. Newer housing and acreage blocks suit larger or prefab builds. Good value where access is easy; Peninsula sites can add site-works cost.
What You’ll Actually Pay — Common Melbourne Granny Flat Builds
Here’s what typical granny flat projects cost all-in across Melbourne in 2026, including build, standard site works, services, and approvals where noted.
1-bedroom granny flat — 40m², turnkey
$105,000–$143,000 total
The go-to Melbourne build for one tenant or a family member. A detached one-bedroom home — bedroom, bathroom, kitchenette and living — with standard finishes, slab and connections. Allow roughly 12–14 weeks once approval is through.
2-bedroom granny flat — 60m², turnkey
$143,000–$200,000 total
The maximum size under most rules and the best rental return. Two bedrooms, full bathroom and a proper kitchen with room for real furniture. Standard-to-mid finishes, slab, services and approval included — allow 14–16 weeks once approved. The workhorse Melbourne investment build.
Prefab / modular 2-bed — installed
$90,000–$152,000 total
Factory-built and craned in, then connected to services on a prepared slab. Faster than site-built and priced lower, with less on-site disruption. Site works, slab and connections are usually quoted on top of the supplied unit price.
Garage / outbuilding conversion to studio
$43,000–$90,000 total
Converting an existing garage or outbuilding is the cheapest route to a secondary dwelling, but plumbing, a bathroom and kitchenette, insulation, glazing and compliance upgrades drive the price. Best value where the existing slab and walls are sound.
Custom architect 2-bed / two-storey
$247,000–$404,000 total
A top-end, architect-designed build — premium finishes, a bigger footprint or a two-storey layout on a tight block. Design and engineering are required; you’ll see these most across the established middle-ring suburbs where land values justify the outlay.
What Affects Granny Flat Costs in Melbourne
Build method
The cheapest path is a prefab/kit unit (from ~$76,000 supplied); a standard site build is the middle ground, and custom or two-storey designs sit at the top.
Size & bedrooms
A 1-bed (35–45m²) runs $105,000–$152,000 turnkey; a 2-bed (~60m²) $133,000–$200,000. 60m² is the cap in most states.
Site works & access
Slope, rock, poor access and craneage add $14,000–$38,000. Flat, clear, easy-access blocks are far cheaper to build on.
Service connections
Water, sewer, power and stormwater connections add cost — keeping wet areas near the main house’s services keeps plumbing runs short.
Approvals
In Victoria a small second dwelling up to 60m² can often be built without a planning permit (subject to overlays), though a building permit is still required and it cannot connect to reticulated natural gas.
Finishes & inclusions
Standard finishes keep costs down; stone benchtops, premium flooring, decks and air-conditioning push a build toward the top of the range.
How to Save Money on a Granny Flat in Melbourne
Frequently Asked Questions
Our Methodology
The prices on this page are compiled from publicly available cost guides, leading tradie marketplaces, peak industry body data, and individual builder websites across Australia. We cross-reference ranges from several sources and adjust for city-specific cost differences using advertised rates, wage data, and cost-of-living indicators. Our guides are produced independently — no tradesperson can influence a published figure. All prices are estimates and vary with your specific job, so always get multiple quotes. Last reviewed June 2026. Read our full methodology →