Modular techniques offer up to 40 percent time savings on construction, lower energy bills for buyers of modular homes based on research by Curtin University, as well as significantly lower funding costs of 35 to 40 percent less than traditional building methods.
CU researcher Jemma Green says, “Because you build it faster, you borrow the money from the bank for less time, so you draw down the debt faster. If you’re an equity investor you want your money in and out of the project, and if you’re building it faster you’re selling it faster, so there is an equity uplift of about 15 percent.”
However, she says banks typically make progress payments on site, when the walls are up, the roof is on, the doors are locked, etc. Since modular homes are built inside a factory, “Banks are hesitant to make payments for progress that isn’t happening on site.” The result is builders have to self-fund projects which limits their ability to build, as MHProNews understands.
While several of the largest modular builders have developed modular projects for the Department of Housing, there are still a lot of misconceptions that modular is not equivalent in quality to site built homes. Geoff Cooper, director of housing for the Master Builders Association, said modular will have a larger market share over time, but right now there is a lot of prejudice from realtors, appraisers and a building community that is conservative and does not want to change.
He said, “There are a lot of quality control systems in place to ensure the product they bring to market is of a very high quality and they get very frustrated in the perceptions of modular being cheap, nasty and poor performing. As an association we are working to try to change consumer perceptions on that point.” ##
(Photo credit: businessnews.au/BGC Residential)
