Are their Downsides to Prefabrication?
It is very much true that everything designed by man has its strength and weakness for that reason we will be committing a big fallacy if we fail to mention the problems with prefabrication as much as we told you about the benefits. Many today see prefabrication as the answer to reducing construction costs and improving productivity in New Zealand, but our experience shows there are some tunnels to pass through before seeing the light.
Reflecting on all the activities which the process encompassed, we would say with all confidence that constructing the house was the easy part!
The sales process was an eye opener and it raises a number of problems that prefabrication needs to overcome if it is to become the answer to New Zealand’s housing affordability and supply challenges.
What rapidly became apparent was that prefabricated houses have to compete with “normal” houses which are sold as a combined home and land package. Although some buyers had land and were looking for a house, they wanted a “ready to move in” price including foundations, services and all consents. Not only was this particularly difficult in Christchurch where most sites require specific foundation design, it also suggests that any prefabrication business needs to offer a wrap-around service to provide the full equivalent package. You can’t just sell the house and expect the new buyer to sort out the moving, consent and services details.
Highly Efficient Material Utilization
In our case we were trialing off-site construction of the entire house, and this limited the design to a 2 bedroom, 100m2 house which was as big as could be built in the factory and easily transported. The implication of this is that off-site construction of larger houses needs to take a modular approach, more like that trialled in our Hobsonville duplex which built walls and pods off-site and put them together on-site.
One outstanding challenge to prefabrication that can not be overemphasized is finance; it is no doubt another major barrier to prefabrication housing. The security for a loan is a piece of land – not a house. As we discovered when financing the High Performance House onto its HIVE site, no bank will lend on a mortgage until the house is on the proposed site. In addition, no bank will lend on a mortgage without a valuation but valuers are reluctant to value a house without a piece of land associated with it!
This means buyers have to pay cash or borrow against another house if they want to shift a prefabricated house onto a site – a major barrier for many buyers. This reinforces the bach/second house/low cost granny flat view of prefabrication.
Finally, we all know the power of feedback to any business in this generation we are now living, so feedback from buyers, particularly in the run up to the auction of the house, was indicative of another challenge for prefabrication. Call a house prefabricated and buyers immediately assumed it was “cheap”, “a kitset” and “a step above a portacom” (too many people with bad memories of old prefab classrooms!). Our real estate agent reported that buyers expected to pay only about half what a “normal” house costs.
This was despite the HIVE High Performance House being very well appointed with quality finishing and jam-packed with good performance features which would substantially reduce running costs in the future. Put that in a “normal” house and I’d hazard a guess that you’d pay a premium for it.
So, to cut the long story short, we have to turn around the market perception of prefabrication. It’s going to take a concerted effort – building quality is not enough, we have to make it easier for buyers AND change their thinking. For our part, here at Beacon, we are working out some beautify term which would be the best synonym for the word “prefabrication”. From the reviews we have gathered, it is obvious that too many bad hands have been in association with prefabrication.