A kit granny flat advertised at $85,000 and a custom build quoted at $190,000 are not two prices for the same thing, and comparing them straight is how people end up thirty grand short halfway through. One of those numbers is a product. The other is a dwelling with a slab under it, water and sewer running to it, a certifier's approval on it and a working kitchen inside it. The kit number becomes the second thing eventually. It just does it in instalments, paid by you, to people the kit supplier never mentioned.
I don't say that to talk anyone out of a kit. On the right block a kit is a sensible buy and I've told people so. But the comparison has to be like for like, and almost nobody does it that way because the kit price is on a webpage and the rest of it isn't.
We've covered whether a kit or a custom build suits your block generally on our kit vs custom granny flat page. This is narrower: the money. What's inside that headline figure, what's outside it, and how to get to a number you can actually compare.
What "kit" means depends entirely on who's selling it
The word covers at least three different products, and the price gap between them is enormous.
At one end there's a flat pack. Wall frames, roof trusses, windows, doors, external cladding, delivered on a truck to your kerb. No slab, no plumbing, no electrical, no linings, no kitchen, no bathroom, and no labour. It's a materials package. Someone still has to build it, and that someone is a licensed builder or a very committed owner-builder.
In the middle sits the more common offer, a supplied-and-erected shell. Frame, roof and lockup done for you, sometimes with linings, usually with the wet areas and the kitchen listed as an allowance or a separate stage.
At the far end is a transportable, which arrives largely finished on the back of a truck and gets craned into place. That's the closest thing to what most people picture when they read "kit granny flat", and it's the priciest of the three.
So the first question isn't what does it cost. It's which of those three am I looking at, and at what point does the supplier's responsibility end. Ask for it in one sentence: what is the last thing you do before you leave my property.
The costs that sit outside almost every kit price
Here's the list I'd hand anyone comparing quotes. Almost none of it appears on a kit brochure, and all of it is yours.
The slab or footings. A kit sits on something, and that something is engineered to your soil classification, not to a generic pad. On a reactive clay site or a block with fill, the footing design changes and so does the price. On a fall you're into stepped footings or piers, and that's before any retaining.
Site preparation. Clearing, levelling, spoil removal, and access. Getting a truck and a crane into a rear yard in Wollongong is a genuine problem on plenty of blocks, and if the answer is a smaller crane with a longer reach, or hand-carrying materials down the side, the labour cost goes up in a way nobody quoted for.
Services. Water, sewer, stormwater and power to the new dwelling, plus whatever the connection points force on you. A sewer junction that's on the wrong side of the block, or a switchboard that has to be upgraded to carry a second dwelling, are the two that surprise people most often. Neither is exotic. Both cost real money.
Approval. Your certifier's fees, the long service levy on work above the threshold, and whatever reports your site drags in: bushfire, flood, geotechnical, arborist. The kit supplier's design being pre-approved somewhere else means nothing on your land.
The finishing trades. Depending on the package: internal linings, painting, floor coverings, waterproofing, tiling, kitchen, bathroom fitout, and the electrical and plumbing fitoff. This is usually the biggest single item people forget, because a lockup shell photographs like a finished house.
Everything outside the walls. Driveway or path to the door, a clothesline, fencing, the landscaping you have to reinstate after a truck has driven over it, and stormwater to a legal discharge point.
Add all that up and the honest kit total on a straightforward block lands a lot closer to a custom build than the two headline numbers suggest. On a hard block it can pass it. Our granny flat cost guide for NSW sets out where the all-in figures usually land, and that's the number to compare against.
The 60 square metre line, and what it does to a kit
In NSW a secondary dwelling is capped at 60 square metres of total floor area under the Housing SEPP, unless your council's local environmental plan allows something larger. That cap is what makes granny flats work, and it's also what makes catalogue designs feel tight.
Sixty square metres is not much, and every square metre spent badly hurts. A stock plan drawn to hit the cap will usually get there by shrinking storage and circulation, because those are the bits that don't show up in a render. You end up with two reasonable bedrooms, a decent living space and nowhere to put a vacuum cleaner.
Worth knowing too: what counts toward the cap, and what your council counts as habitable, is worth confirming for your own block before you fall for a plan. Covered patios, storerooms and the like get treated differently depending on the control. The rules on size, setbacks and site area are in granny flat size and setback rules in NSW, and the approval path itself is in granny flat council approval in NSW.
Read the inclusions like a contract, because that's what they are
Two things I'd check on any kit specification before signing.
First, the actual materials. Wall and ceiling insulation ratings. Window frames and glazing, single or double, aluminium or thermally broken. Wall stud size and spacing. Roof pitch and gutter size. Waterproofing system in the wet areas and who warrants it. External cladding and its fixing detail. These are the numbers that decide whether the place is comfortable in a Wollongong February and whether it's still sound in fifteen years. A kit built to the National Construction Code is legal, and the Code is a floor, not a target. The ABCB publishes Volume Two of the NCC, which is the one that covers houses and secondary dwellings, if you want to see what the minimums actually are.
Second, who is licensed for what. In NSW, residential building work above the threshold has to be done by a licensed builder, with home building compensation cover taken out before any money changes hands. If the kit is supply-only and you engage trades yourself, you may be acting as an owner-builder, which changes your insurance position, your resale disclosure obligations and your exposure if something goes wrong. The NSW guidance on building or renovating a home sets out the licensing and insurance side. Sort this out before you pay a deposit, not after.
Where a kit genuinely wins
Flat block, easy truck access down one side or through a rear lane, services already close to where the dwelling is going, and a plan you're happy to live with unmodified. That's the profile. On that site a kit is faster, the price holds better than a custom build because less of it is exposed to site conditions, and you're paying for a factory's efficiency rather than a crew's hours on your lawn.
The other case is a genuinely secondary use. Occasional guests, a teenager, a home office with a bathroom. If nobody is living there permanently, the compromises in a stock plan cost you far less.
The three conditions that decide it
If you want to make this call without a spreadsheet, it comes down to three things, and they're in order of weight.
Access and ground. If a crane or a concrete truck can get to the spot without drama, and the block is close to level with no rock and no fill, a kit keeps most of its price advantage. If access is tight, if the land falls more than about half a metre across the building footprint, or if the geotech comes back reactive, the site works swallow the saving and a design drawn for the block is better value. This one condition decides most jobs on its own.
Who lives there, and for how long. Permanent occupant means storage, ceiling height, natural light, cross-ventilation and a bathroom you can age into. Those are the things a fixed plan can't give you and a custom design can. Guests and short stays mean a stock plan is fine.
Whether you need the plan to change. The moment you start moving walls, relocating the kitchen or adding a metre, a kit stops being a kit. Suppliers price variations badly because their whole model depends on repetition. If your wishlist has more than two changes on it, price a custom build properly before you commit, because you may already be paying custom money for a catalogue outcome.
Two of those pointing at custom is enough for me to say don't buy the kit.
Either way, the move that saves the most money is getting an all-in number for both options on your actual block before you compare anything. We build granny flats across Wollongong, the Illawarra and the Southern Highlands, and you can see how we run those jobs on our granny flats page. If you've got a kit quote in front of you and you're not sure what's missing from it, send it through the contact page or call 0434 037 851 and I'll go through it with you line by line. I'll tell you if the kit is the better buy.
Want a hand with this at your place? Get a free quote or call 0434 037 851.