Sydney granny flat rents at record highs

Some landlords are charging thousands of dollars a month for granny flats, as asking rents for Sydney’s granny flats jump to their highest price on record.

The weekly asking rent for a granny flat increased 5.95 per cent over 2014/2015, according to Flatmates.com.au data. This was a higher rate of growth than houses (3.9 per cent) and apartments (1 per cent).

Those wanting to rent this affordable housing option should expect to pay an average of $292.46 per week – the highest in the country, followed by Perth at $251.25 which remained flat over the year.

Yet some granny flats are securing far more than the average.

A brand new three-bedroom granny flat at 63A Ryde Road, Pymble is available for $650 per week, with Savills Cordeau Marshall Gordon senior property manager Helen Hovey​.

“It has only been up for a week and has already had some inquiry,” Hovey said. The main residence and the granny flat are up for rent separately.

Granny flats are also asking thousands of dollars a month in Frenchs Forest, Dee Why, Wheeler Heights and North Manly.

The tight rental market, low first home buyer numbers and steady levels of migration are behind the increase, said Domain Group senior economist Dr Andrew Wilson.

“The vacancy rate has tightened again and we are still seeing supply struggle to keep up with demand for rental accommodation,” Wilson said.

The vacancy rate dropped 0.1 per cent over the month to July 2015, according to Domain Group data.

Tenants are showing strong demand for this type of cheaper rental, said Edwin Almeida​, principal of agency Just Think Real Estate.

“They do rent well and quickly,” he said. 

He warned that in some suburbs there is a “glut” of granny flats, such as in the western suburbs, which would limit the amount of rent that could be charged.​

A spokeswoman for the Department of Planning and Environment confirmed there had been a 68 per cent increase in granny flat and dual occupancies approved in NSW, up to 4818 approved in 2013/2014.

General manager of flatmates.com.au Thomas Clement said granny flats do exist in the inner-city areas, however it’s usually homes with larger land in the suburbs that offer these rentals.

“Places like the upper north shore, northern beaches and western suburbs are popular for granny flats, as home owners have more land to accommodate them,” Clement said.

The priciest granny flat suburbs on average in Sydney are North Ryde ($371.25), Avalon Beach ($370), North Curl Curl ($365), Frenchs Forest ($364.73) and Kingsford ($360).

The cheapest options are West Ryde ($206.75), Rockdale ($205), Arncliffe ($205), South Hurstville ($202.85) and Liverpool ($192.50).

The lowest-price granny flat in Sydney currently available for rent is in Cambridge Park, asking $190 per week.