Thinking of putting a second dwelling on your property?

Second dwellings are becoming more popular as people look for alternative solutions and income. Photo / Getty Images

Rocketing house prices have seen a surge in savvy Kiwis who are building secondary dwellings on their property to earn an extra buck.

Secondary dwellings, granny flats and tiny homes are being built for extended families, rental tenants or Airbnb-income spinners.

Latest figures show the demand for Bay of Plenty lifestyle blocks has soared after Covid-19 as more people search for a spacious haven.

Data from the Real Estate Institute of New Zealand show in 2021 to March, 604 properties sold at a median price of $980,000. Over the same timeframes in 2015, 415 lifestyle properties sold at a median price of $520,000.

REINZ acting chief executive Wendy Alexander. Photo / Supplied

Acting chief executive Wendy Alexander said homeowners had increasingly sought more space as a result of Covid.

Anecdotally, buyers of lifestyle properties tend to be those who had owned property before and were looking for a "safe haven".

"In terms of income opportunities, it's important that people undertake their due diligence before purchasing a lifestyle property. Speaking to local owners of lifestyle blocks and agents who specialise in this area are two good places to start.''

Simon Anderson, managing director of the Realty Group Ltd, which operates Eves and Bayleys. Photo / File

Simon Anderson, managing director of the Realty Group Ltd, which operates Eves and Bayleys, agreed and said if the property had a second dwelling there would always be strong demand.

These were attractive for growing or migrant families and those who wanted extra income.

Anderson said when he built his home on a lifestyle property three years ago he also built a self-contained separate two-bedroom dwelling.

''There are rules around it but most lifestyle properties will have a second dwelling on it.''

Meanwhile, pre-fab units were also getting dropped onto properties as well for Airbnb opportunities.

''Everyone wants to make some money out of their lifestyle block. Whether that is a small orchard, a rental property or a few beefies.''

Tiny House Builders owner Rebecca McLean. Photo / File

Tiny House Builders owner Rebecca McLean said business had definitely increased.

''I think housing prices definitely have something to do with it. That is causing people to look at different solutions.''

''We are seeing children going to live with parents and parents going to live with children.''

McLean said her own parents would join them shortly in a tiny home.

''It's a really nice outcome to be honest as I think it is bringing more families closer together while allowing them their own independence and space.''

Transition and change were other factors driving the trend.

This had also been influenced by Covid as people started looking seriously at alternative housing, she said.

Tauranga City Council Building Services manager Steve Pearce said secondary dwellings, and granny flats had become increasingly common as property prices continued to rise across the country.

He said the City Plan set out the rules for development and use of any land within Tauranga and identifies what you can and can't do without resource consent.

A secondary dwelling consent was not required in some zones, he said.

''You will usually require a building consent to make sure the work completed is compliant with the building code and safe for people to occupy.''

Rotorua Lakes Council Planning and Development Solutions manager Jason Ward agreed and said there had recently been an increase in the number of second dwellings, particularly tiny houses.

''While we can't speak to why exactly ... we assume it is due to a greater awareness of the tiny house market in general, and people looking for additional income streams or options for intergenerational living.''

Exemptions to the Building Act meant a consent was not needed to build an additional standalone, up to 30sq m building for sleeping (without plumbing). But a second dwelling including tiny houses would require a consent.

Consent for a tiny house cost $1700 plus any inspection fees while a caravan is a vehicle and therefore falls outside the Building Act unless it is immovable and occupied permanently – then it would be defined as a building.

If a caravan could be moved, it was unlikely they would ever require a building consent, he said.

Western Bay of Plenty District Council Policy, Planning and Regulatory Services group manager Rachael Davie said secondary dwellings were popular options for extra family, rentals or for farmworkers.

From 2018 to 2020 the council approved 20 additional dwellings primarily in residential zones.

Meanwhile, over the same timeframes, it approved 47 minor dwellings in the rural, residential and lifestyle zones.

Statistics from REINZ also reveal Tauranga reached its fourth record median price in a row climbing to $937,500 from $907,500 in March - and 34.8 per cent up from $695,500 in April 2020.

Rotorua's median house price has dropped 3.1 per cent to $630,000 in April from $650,000 in March - but up 24.8 per cent from $505,000 in April 2020