When PrefabNZ’s chief executive Pamela Bell released its Capacity and Capability report in March this year, she was excited that the industry study figured that by 2020 the manufactured construction companies would be delivering 7000 houses a year from their factories.
“This would deliver 70 per cent of KiwiBuild’s 10,000 homes per year target.”
Six months later, the news is even better.
“Key manufacturers are moving ahead of KiwiBuild to start supplying now. There’s been at least six companies announcing expansion plans of existing factories or new investment in the past few months,” she says. “We’re projecting now that their capacity is nearer to 11,500 houses.
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“So now it’s not about methodology — that’s been proven. It’s in the domain of logistics, consenting, finance. Those last two are things that PrefabNZ is working on with central and local government, and with banks.”
The way banks finance prefab homes, which are transported on to site in close to finished state, means a different way of staging mortgages compared to a traditional build. PrefabNZ is working with banks to structure mortgages for transportable houses and access the same warranties to guarantee the deposit. There has been success, with Westpac announcing a finance package for transportable houses back in May.
The organisation is also working with big spenders for housing procurement such as Housing New Zealand or HLC, as the cash flow for manufacturing whole buildings for delivery to site requires a new way of staging contracts and making payments compared to traditional sticks and nails one-off construction payment schedules.
“It’s a difficult space to enter, and you don’t want the ‘make a quick buck’ brigade,” Bell says.
“Prefab is not the silver bullet, it’s part of a suite of highly refined, quality executed prongs.”
Companies are already well established in the market.
Since mid-2017, Takapuna’s Solution Street, an offshoot of upscale developer Legacy, has installed affordable houses on sites from Mangere to Panmure, Glen Eden and Glenfield, with 55 more new builds in the pipeline. It is working with manufacturers on a design and engineering answer to pumping out volume at quality — 200 houses in 2019, ramping up to 500 a year.
Development manager Mitchell Jefferson and sales and marketing manager Mike Beazley have figured out how to shave costs all the way through the building pipeline: standardisation and prefabrication are only part of the mix. The company makes the most of unitary plan allowances to insert two or three new, warm houses where one old place sat. It partners with multiple manufacturers to put the houses together.
The company is skilled at spotting sites that are flat with good frontage width to fit multiple houses, arranged to get privacy, parking (no garages to reduce costs), with an eye to sustainability.
All its houses are rated to at least Homestar 6 so they’re cheap to run as well as buy, land is deliberately sited near transport hubs, schools, shops and a community.
“It’s not cheap if you’re miles out of Auckland,” says Beazley. “You want to build in an existing community, using existing infrastructure, not greenfields. We like to treat it as a community, so the buyers meet each other first, so when they move in no one is a stranger.”
Engineering has focused on how a built house can be put together in the factory, have all the finishes down to floor coverings and appliances, still fit on a truck, and be bolted together on site. A ground and first floor, already with the roof on, are separately craned on to timber pile foundations.
A few days’ work adds weatherboards to connect the floors on the outside and finishes interiors, adding stairs and connecting services.
The company has learned that more than engineering processes needed refining, adding staff to speed up the quality of documentation for consenting process, issuing titles and codes of compliance. (This is now done, for example, before the modules leave the factory.)
“Now with the KiwiBuild criteria, our houses are within the price caps, so we can really ramp up,” says Jefferson. “Everything is scalable, we can now speed it up, even things like site search, consents.”
Some of the other companies have switched from industrial and commercial builds, where big steel pre-fabrication is common, to residential.
Spanbild, 50 years old next year, has built more than 5000 houses over 20 years. Its acquisition this year of modular housing manufacturer Concision (which had built 500 houses since 2016) means it can take advantage of the newest technology to produce 1000 units a year, says company chair Don Elder.
The company employs 50 people on two shifts, and could ramp up to a 24/7 operation to meet demand.
Elder points to multi-storey buildings that can be installed at three days each floor (compared with a month each floor in traditional builds). And the Christchurch-based company is grappling with shipping buildings around the country, possibly as flat pack, and ramping up production in Auckland.
Design of the homes is key. The industry jargon is DFMA (design for manufacturing assembly) which means that instead of re-detailing an architect’s plans to fit manufacturing — wasteful of time and materials — the house is designed based on Concision’s standardisation.
But architects are nibbling at the edges. Auckland TOA Architects’ work includes Vinegar Lane apartments. It is building the prototype of what it hopes will be the first of a 1000 Māori Modular Houses (MMH).
Directors Nick Dalton and Craig Wilson have collaborated with Mike Greer Commercial to pre-manufacture walls, floors and roofs, with wiring, windows and plumbing, to assemble on site.
“We want to introduce design, so that it’s not cheap [looking] and nasty and ugly,” says Dalton. “Let’s up spec. Instead of low cost, you have medium to high design. It starts at a fundamental level, still has quality, sustainability and good design.”
The pair, who have tested a lot of the concepts on Wilson’s new house in Grey Lynn, have kept house size small (under 65sq m for two bedrooms, which also meets many councils’ limits for an accessory dwelling; 95sq m for three bedrooms) through efficient design (no corridors) and stretching living space with courtyards.
Their modules can be dropped on to fast-installed screw piles (German technology that can be done in half a day), which means rolling land can be used for the houses, not just flat.
The architect is fond of wood: interior plywood for looks and efficiency (no wet trades), cross-laminated timber for floors and structure (a couple of hours to install) and a rustic chemical-free exterior cladding Abodo.
On a larger scale, Whangarei-based manufacturer Donovan Group has spent two years focusing on volumetric construction (panellised components, as distinct from flat pack components used on standard building sites).
It has partnered with window and joinery manufacturers, invested heavily in buildings and plant and expects to grow its workforce in this part of the business from 15 to 70 people.
With not all the automation in place, already 18 modular houses have gone out to home sites. Modular Group general manager John Lawson is aiming for 70 a year. That will double that when automation is fully installed in the next year.
A repeated gap that many manufacturers have identified is the lack of standardisation for window and door joinery. The current totally customised business model adds cost and time delays.
To solve this, pre-fab volume manufacturers have each partnered with joinery companies to devise a standardised suite of joinery for their houses, and the windows and doors are installed in the panels before they are shipped to site.
PrefabNZ, with its manufacturing members, is putting huge effort into skills development with industry training organisations.
Whangarei’s Donovan Group has capacity to work with the industry training organisations, Lawson wanting his factory to help the local community, growing work opportunities and teaching new skills. TOA Architects envisage building employment opportunities, along with their houses: local people earning the skills and mana to assemble their own, healthy, homes.
“In three years, the future will be in offsite manufacturing,” says Elder.
