Prefab-ulous cost savings

ALAN WOODS
Last updated 05:00 05/04/2014

Relevant offers

Industries

Labour details KiwiSaver variable savings plan Snakk Media mulls ASX listing Greens pro-market: Russel Norman Tourism industry a boon to Waikato Ebos profit rises sharply Can Air NZ's profit take off? Prime retail rents at record levels Tourism Holdings shares soar NZOG buoyant after positive year Furniture chain sales rise

Prefab has many connotations. The "prefab four" was a name attributed, but not kindly, by critics to manufactured pop band The Monkees. Likewise in New Zealand it has associations with the transportable school rooms of the 1970s.

But supporters of prefab homes want to ditch the negative connotations. They want to change attitudes to a type of building which has big traction in other parts of the world.

That call to open our minds to factory-built houses comes as house prices leap in post-earthquake Christchurch and accommodation-stretched Auckland.

Wellingtonian Pamela Bell, of PrefabNZ, an industry hub for prebuilt construction, says the building of a 157 square metre prefab home can deliver 15 per cent cost reduction over a traditional build on-site.

This brings it down to $214,000 from $246,000 according to Branz, a building industry research group.

But "the reasoning for prefabrication is much broader than cost savings - the main improvement is about the quality," Bell says.

Asked if there were downsides, Registered Master Builders' Federation chief executive Warwick Quinn says there needs to be a change in public perception.

"I think a lot of them are tainted by the 1970s school building, chucked up to house students . . . but there's some very sophisticated techniques and good quality prefabrication units available now."

Quinn says there are already elements of prefabrication now in the making of flooring, roof trusses and framing.

Could traditional building skills disappear with a factory approach? Quinn says there will always be demand for bespoke houses, and skills will evolve to new techniques.

The demand for new affordable homes is already seeing new prefab solutions coming to market, Quinn says. Earthquake rebuilds in Christchurch and leaky home replacements in the North Island point towards a long wave of new building.

"The key though I think for prefabrication to really get hold, is it needs sustainable work in order for investors to put up capital [for factories] and have a payback period," Quinn says.

The demand for these types of homes has to be substantial to make it work.

"So with Christchurch being what it is and Auckland with the housing shortages, they're probably the only two markets in New Zealand where you can do that."

Already, for example, Mike Greer, director of one of Canterbury's largest volume builders, Mike Greer Homes, has seen his annual house build numbers ramp up from 450 two years ago, to 600 in 2013, to an expected 800 this year as suburbs like Wigram and Halswell in the south of Christchurch expand.

Ad Feedback

Greer and a rival building firm, Spanbild, are trailblazing a full factory building process. They say they can deliver the traditionally built homes through a factory with no discernable difference.

Greer says the recently announced joint venture between the two will produce "panelised" buildings to help "get construction costs down".

The panels will be formed out of hi-tech German machinery made by Weinmann, which he says is "like the Mercedes" of the machine industry.

The panelisation system is like having a car assembly line. The walls roll down the factory, with insulation, electrics and plumbing installed as part of a "finished wall" that goes to site for rapid assembly.

The firms will commit $14 million for the project helped by bank debt. They have secured a 12,500 sqm site at Izone industrial park south of Christchurch for a factory capable of producing 1000 buildings a year when it is finished in December.

Greer says his existing home designs will be created at the factory. "The only difference the public will see is the pace they're built at."

Spanbild business development general manager Tim Blake says they have also been in talks for a South Auckland site for a potentially bigger factory to tackle the "golden triangle" of population growth - Auckland, Hamilton and Tauranga. The venture wants to reduce build times from 16 weeks to 9-10 weeks and both partners are looking for a 10 per cent reduction on the cost of a standard 3-bedroom house, now at about $300,000. Spanbild is building about 130 homes under its Versatile brand on Auckland's North Shore and a smaller number in Canterbury. They are talking to Housing New Zealand, hoping to win other work.

PREFAB NZ's "Value case for prefab" document states 15,000 houses are needed in Auckland immediately, and a further 15,000 for Canterbury. It warns that quality has suffered in past construction booms. The issue has captured the attention of politicians and become a political point-scoring venture.

The Spanbild-Mike Greer announcement drew the presence and support of Prime Minister John Key and Earthquake Recovery Minister Gerry Brownlee, and the Ministry of Business, Innovation and Employment (MBIE) is working on the idea. Labour housing spokesman Phil Twyford says Labour's Kiwibuild programme, combined with offsite manufacturing and prefabrication, will knock up to $32,000 off the cost of a standard home. Labour has a commitment to build 100,000 affordable starter homes, partly through the prefab process.

MBIE spokesman Chris Kane says the Government's focus on prefabrication capability comes via the Building and Construction Sector Productivity Partnership, set up with the industry in 2011 to tackle low construction sector productivity.

Back in the late 1930s Keith Hay, who later became a mayor of Roskill Borough as part of a long local body political career, set up Auckland-headquartered Keith Hay Homes, at first transporting existing houses to new sections.

He then started prefabricating homes and delivering them on the back of a truck, remembers Keith Hay Homes Christchurch branch manager Cliff Monk.

The company has branches throughout New Zealand now including in the Wairarapa and Bulls and has built 22,000 homes. Homes that measure 140 sqm can be transported on truck to a site.

"We sort of say it's the ultimate prefabrication . . . we complete the whole dwelling in a yard and then we deliver it.

"We're dealing a lot with property investors, especially with the changes in the [Christchurch] City Plan with some of the zonings, they're really starting to [fill] back sections and the eastern suburbs." The Christchurch branch of Keith Hay was budgeting to build 40 houses in the year to March 31, 2015.

BELL says with New Zealand heading into a building boom, the construction industry is at a tipping point in the uptake of prefabrication and offsite technologies.

Preconstruction helps avoid weather delays, and is safer and faster. And there is less environmental waste and disruption to the neighbourhood.

New Zealand already has a diverse range of small to medium sized suppliers making prefabricated building components, Bell says.

In Nelson there is both Nelson Pine, making laminated veneer lumber, and XLam, making cross laminated timber (CLT), a form of "giant plywood", Bell says.

XLam project engineer Sam Leslie says "hugely strong" CLT panels made out of pinus radiata or douglas fir can be connected like Meccano to form a structural wall.

Auckland not-for profit group Pure Advantage put a stake in the ground in February to deliver high-performance affordable housing.

It has asked for expressions of interest from builders and backers for a pilot project of 300-500 homes that could be split into different markets.

Pure Advantage chief executive Duncan Stewart says about 85 "responses" had been received with these potential partners ranked according to what they could bring to the prefabrication table.

A partnership announcement could come in two to three months.

- BusinessDay

Special offers

Featured Promotions

Sponsored Content