The side-by-side numbers ($200k budget, Adelaide 2026)

For a straightforward metro block with an existing 3-bed home and 500m²+ rear yard:

• Granny flat 2-bed detached: ~60m² floor area, $180k-$220k turn-key, 14-20 weeks total
• Ground-floor rear extension: ~55m² integrated area, $180k-$260k turn-key, 20-28 weeks total
• Second-storey extension: ~50m² upstairs area, $220k-$320k turn-key, 28-40 weeks total

When a granny flat wins

Choose a granny flat if: you want rental income (SA now allows separate rental since Dec 2023), you want the fastest build option, you want a completely separate space (older parents, adult children, home office), your block is 700m²+ so you don't sacrifice private open space, you want the lowest cost per m² of new build. Granny flats deliver 8.5-10% net rental yield; extensions deliver 0% yield unless you set up an odd sub-let scenario.

When an extension wins

Choose an extension if: you need integrated family living space (more open-plan, extra bedrooms tied to existing bathroom), you want the resale-value uplift on the main dwelling (a well-executed extension typically returns 80-110% of build cost in resale; a granny flat returns 55-75%), you have a smaller block where a detached structure would eat too much yard, you want the design freedom of altering the main dwelling roofline and floor plan, you don't want two sets of council fees or two service metering setups.

The hidden factor most homeowners miss

Council approval treatment differs. A granny flat as a Class 1 ancillary dwelling gets a full Development Approval process (6-12 weeks in most councils). A rear extension may qualify as a Deemed-to-Satisfy pathway in some cases, cutting approval time to 4-6 weeks. But an extension that alters the front elevation, adds a storey, or crosses a heritage overlay hits the same 12-20 week approval as a granny flat. Get a PlanSA property report before deciding.

Frequently asked questions