How much does a granny flat cost in Melbourne?
In Melbourne a one-bedroom prefab granny flat delivered to site costs $80,000–$120,000, before it is connected. Site-built and finished to turnkey, a 35 to 45 m² studio or one-bed costs $110,000–$160,000, while a roughly 60 m² two-bed costs $140,000–$210,000, typically $175,000. Per square metre of floor, turnkey work is priced at $2,300–$3,500. A granny flat has to share a lot with an existing house, and separate houses make up less of Melbourne's housing than Australia's, 67.8% against 72.3% (ABS 2021 Census), so the first question is whether your block has the room.
Comparing cities, or after the Australia-wide picture? See the national guide: How much does a granny flat cost in Australia?
Detailed Pricing — Granny Flat Cost in Melbourne 2026
| Service | Low | Typical | High |
|---|---|---|---|
| Prefab / modular granny flat — 1-bed (delivered) | $80,000total | $95,000 | $120,000 |
| Studio / 1-bed granny flat (35-45m², turnkey) | $110,000total | $130,000 | $160,000 |
| 2-bed granny flat (~60m², turnkey) | $140,000total | $175,000 | $210,000 |
| Custom / premium 2-bed (high-end finishes) | $210,000total | $260,000 | $320,000 |
| Two-storey granny flat (complete, incl. site costs + approvals) | $280,000total | $345,000 | $425,000 |
| Granny flat with attached single garage (complete, incl. site costs + approvals) | $170,000total | $210,000 | $260,000 |
| Garage / outbuilding conversion | $40,000total | $75,000 | $120,000 |
| Turnkey build (per m² built) | $2,300/sqm | $2,800 | $3,500 |
| Site works + service connections | $15,000total | $25,000 | $40,000 |
| Building permit (small second dwelling) | $3,000total | $6,000 | $11,000 |
| Demolition / site clearing (if needed) | $3,000total | $6,000 | $15,000 |
| Driveway, path & basic landscaping | $5,000total | $10,000 | $20,000 |
| Privacy fencing (per m) | $80/m | $130 | $190 |
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Get Melbourne quotes →Prices include GST. Based on Melbourne metro area, October 2026. Outer suburbs may vary.
Melbourne’s Granny Flat Market in 2026
Victoria now has a “small second dwelling”: one of up to 60 m² no longer needs a planning permit in most cases, though it still needs a building permit and can’t be subdivided or sold separately. In the General Residential Zone a permit is needed only on a lot under 300 m².
In the City of Melbourne itself, heritage, design and special building overlays can still require a planning permit. The table’s small-second-dwelling building permit row is $3,000–$11,000.
At the 60 m² limit and the table’s typical turnkey rate ($2,800 a square metre) a flat comes to $168,000; the two-bedroom row itself is $140,000–$210,000.
How Granny Flat Costs Vary Across Melbourne
Inner & Northern Suburbs
Typical cost: $160k–$300k 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: $180k–$330k 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: $150k–$280k 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: $120k–$230k 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: $120k–$230k 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
Five Melbourne granny flats, from the table’s rows.
1-bedroom granny flat — 40m², turnkey
$110,000–$160,000 total
A turnkey studio or one-bedroom at the typical $130,000, with the typical building permit ($6,000) on top: $136,000.
2-bedroom granny flat — 60m², turnkey
$140,000–$210,000 total
Two bedrooms in about 60 m², right at the no-permit limit: $175,000 typical.
Prefab / modular 2-bed — installed
$80,000–$120,000 delivered (1-bed row)
The table prices a delivered one-bedroom prefab ($80,000–$120,000), not an installed two-bedroom; slab and connections ($15,000–$40,000) are extra.
Garage / outbuilding conversion to studio
$40,000–$120,000 total
A garage conversion at $75,000 typical — it still has to meet the small-second-dwelling definition to skip the planning permit.
Custom architect 2-bed / two-storey
$210,000–$425,000 total
Above 60 m² it is no longer a small second dwelling. Custom two-bedroom $210,000–$320,000; two storeys or over a garage $280,000–$425,000.
What Affects Granny Flat Costs in Melbourne
The planning line at 60 m²
In Victoria a small second home of up to 60 square metres needs no planning permit in most cases, as long as no flooding, environmental or other special planning controls cover the land. In the General Residential Zone a lot under 300 square metres still needs one. A building permit is always required; budget $3,000–$11,000 for it.
Prefab, site-built or custom
At the typical price, the factory-built option undercuts an on-site studio, though footings, craning and connections are usually extra. Going custom, a two-bed with premium finishes is $210,000–$320,000. Turning a garage or shed you already have into a flat costs $40,000–$120,000, and a flat built alongside a new single garage comes to $170,000–$260,000 with site costs and approvals included.
An all-electric second home
A small second dwelling in Victoria cannot be connected to reticulated natural gas, so hot water, cooking and heating all run on electricity: heat pump, induction and reverse-cycle are the usual picks. Site works and service connections cost $15,000–$40,000, and keeping the kitchen and bathroom near where the existing house connects to sewer and water shortens those runs.
Where it can sit on the block
The flat must sit behind the front wall of the existing house, and it needs private open space of at least 8 m2, at least 1.6 m wide, reached from a living area. About one Melbourne dwelling in six is semi-detached (16.2%, against 12.6% Australia-wide, ABS 2021 Census), and on narrower lots the setback and open-space rules leave less room to work with. Privacy fencing is $80–$190 a metre.
Who can live there
Family, a dependent relative or an unrelated tenant can all live in a Victorian small second home, but it cannot be subdivided or sold separately from the main house. If you rent it out, the usual tenancy standards apply, including room sizes, facilities and smoke alarms. For context, 30.2% of Melbourne households are tenants, and the median weekly rent was $390 (ABS 2021 Census).
Builder, deposit and insurance
Victoria sets two money thresholds, and every turnkey option here clears both comfortably. Above $10,000, the builder must hold Building and Plumbing Commission registration; above $20,000, Home Warranty insurance is compulsory and is arranged by the builder in your name. The deposit is limited to 5% once the contract reaches $20,000, and a 5 business day cooling-off period runs from when you receive the signed contract.
Access, paths and the wet months
A path, driveway and basic landscaping add $5,000–$20,000, and demolishing an old shed or clearing the site beforehand runs $3,000–$15,000. The regulations also require a clear path from the street to the flat at least 1 m wide with 2 m of headroom. With 66.0 mm in an average October, the wettest month at the city's weather station (BOM averages), ask how the builder protects an open slab and frame in spring.
How to Save Money on Granny Flat Cost in Melbourne
Frequently Asked Questions — Granny Flat Cost in Melbourne
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 October 2026. Read our full methodology →