Perth property market The definitive guide to buying a modular home 3
Experts explain why modular is the future of homebuilding in Perth. Image: Supplied.
  • Australian public slow to accept modular technologies.
  • Modular homes are built quicker, more sustainably, and more efficiently.
  • Technology may alleviate supply-side issues, but is not a quick fix for the housing crisis.

Lackadaisical workmanship, incessant delays, and budget blowouts. Everyone knows a friend or a friend of a friend who has a horror story about off-the-plan purchases.

Sometimes, your builder may even go bust before completing your home, leaving you with a half-finished home, scrap all over your land, and a gaping hole in your pocket. Australian dream dashed.

Building off-the-plan has become akin to winning the lottery, a precarious journey fraught with anxiety. Destination— a ruined house.

Especially in this climate, there are few pros to building new. Not only is doing so exceedingly risky, but according to Ray White‘s data, it is 20% more expensive to build a new home than buying an established one.

National house prices growth is behind construction inflation

National house prices growth is behind construction inflation
Source: Ray White.

Investors and owner-occupier demand have converged in the established market, worsening the housing crisis.

Total property listings – National

Therein lies the rub— Australia needs more homes, but buying new is a horrid proposition.

What about your dreams of filling that vacant plot of land you drive by work every morning with a sparkling four-by-two, kids dashing about in the spacious green backyard, golden retriever included?

Or do we resign ourselves to the future industry tells us is inevitable.

Cramped and grey high-density city living.

Blinding and bright lights filling the streets twenty-four-seven, no refuge from the hustle and bustle in sight. Slapped with obscene strata fees every quarter.

Dystopian.

Are there no alternatives to playing the property equivalent of Russian roulette?

What if there were a way to build new homes better, cheaper, and more efficiently today?

Enter modular.

Modular homes are good homes

Every now and then, you glimpse at some opinion piece about how prefabrication technologies will ‘revolutionise’ the construction industry. Or how some official-sounding building at some university was built entirely using modular technology.

However, most Australians are unaware of the technology, how it works, or that good homes can be built modularly.

I imagine that most Western Australians envision modular homes as shoddy kit homes dropped onto a parcel of land.

In other words, inferior.

“When people think about a modular home or building, the first image they will have would be a container box with low-quality fittings and fixtures,” said University of South Australia senior lecturer, Dr Ki Pyung Kim.

“People’s perceptions of modular buildings are mainly due to mundane design, like pre-fixed ordinary box-type designs, and a lack of opportunities to customise building design as they want,” he said.

“Especially, people think a modular house is only for a temporary purpose, not permanent. So, a modular house is received as a temporary shelter to respond to a disaster such as a flood or bushfire.”

Curtin University senior lecturer and modular building design expert Dr Roberto Minunno told The Property Tribune that this sentiment was mainly local.

Dr Roberto Minunno
Image: Curtin University.

“I worked in many Northern European countries such as Denmark and Sweden. The fact that modular buildings are inferior is a misconception I only experienced in Western Australia (WA),” he said.

“My understanding as a non-Australian is that WA people associate modular buildings with dongas or mine villages or rural houses. Sure enough, it makes sense to build modular in remote locations: you don’t want to ship tons of bricks plus valuable labour some 600 kilometres away in the middle of nowhere when you can send a truck with pre-made homes.

“But that does not mean that homes built for families in the city area will be built the same way!

“Homes for the city area are built following the same technology but different standards, effectively delivering a house that looks exactly like your traditional, double-brick homes, but more quickly and with the necessary insulation, among other technical benefits.”

Dr Minunno also noted that the failure to adopt prefabricated technology extended to WA’s construction industry as a whole. In comparison, our next-door neighbours in Singapore have used prefab technology to build high-quality apartments since the 1970s.

According to Dr Kim, prefabricated materials and components have been widely adopted in other parts of Australia.

“There are three major types of modular or prefabricated designs:

  1. 2D Cassettes, where partial components of a building such as wall, roof, and floor are prefabricated and then delivered and assembled on-site.
  2. 3D Pods are mainly used in bathrooms or kitchens, fully prefabricated as modules and then plugged into a building like pods.
  3. 3D Volumetric, a ‘container box with fitting’ type, where the entire modular house is manufactured in a factory.

“Options one and two are currently widely used in Australia, but option three is relatively low and slow. For example, in Melbourne, Hickory Construction utilised 3D volumetric modular construction very actively, and they have already built high-rise modular buildings along with other types of buildings.

“While option three is not widely used at the moment, it is suitable for high-rise/density buildings/apartments to achieve time and cost benefits.”

“Flats in technologically advanced countries are built much more efficiently, quickly, and safely. We lag behind.”

Dr Roberto Minunno, Curtin University

Is it too good to be true? Dr Minunno argues that building a modular home has few drawbacks.

“We need to distinguish between prefabricated and modular buildings. It seems to be an agreement that modular homes are volumetric spaces (people think of them as sea containers, but structurally they are very different).

“Prefabricated building is an umbrella term that include modular but also panelised buildings. If we focus on the former technology, there are a few valid companies that can deliver quality modular homes in Perth metro areas, and in line with their pros, these homes would be built efficiently, up to high industry standards, and generally much more quickly than traditional homes.

“In terms of the cons, I don’t think there would be many for the clients.

“I conceptualised a modular building called Legacy Living Lab (L3) in Fremantle and built it with a local company, Fleetwood Building Solutions, and now manage the space for research and industry connection; I showcase the building to plenty of people.”

Legacy Living Lab (L3)
Image: Curtin University.

“The feedback I always receive is that they want to live in a building like that! The only small criticism, if any, is that the floor sounds ‘hollow’. It’s something people get used to extremely quickly, though.”

The perks and pitfalls of modular

Dr Kim took us on a deep dive into the strengths and weaknesses of building a modular home. He says modular homes are timesaving, with construction schedules not being impacted by weather conditions and homes mostly built in a controlled factory environment.

Moreover, developing or customising module designs requires less time and effort since the designs and materials are standardised.

Modular construction is also safer and more productive owing to the controlled working environment.

With consistent temperature and lighting, tools staying safely in designated places, and no cranes, trucks, or building materials being physically moved by site workers, the work environment is comfortable, increasing productivity.

This results in a better-quality product with fewer defects.

All materials are stored safely within a secure factory, which means there is less chance of theft compared to an open construction site.

Finally, because module designs and materials are uniform, there is less waste when manufacturing, reducing carbon emissions and producing a more sustainable built environment.

Nevertheless, Dr Kim says modular construction has several disadvantages.

As construction design and materials are standardised, there are fewer opportunities for customisation. Hence, modular construction has been mainly used for apartments, hotels or student accommodation.

“All building components such as structure, services (MEP and HVAC), and fittings must be well-coordinated before the manufacturing stage. Once manufacturing commences, it is very difficult and costly to change designs since designs are fixed. When the designs of each building component are not properly coordinated, reworking will cost quite a lot as well as well as creating delays,” he continued.

Risks are also present when transporting prefabricated parts to the construction site.

“If any damage occurs during transportation, the repairing costs will be very expensive— bringing it back to a factory, replacing or repairing damaged components, then transporting it again which causes time delays as well.

“A truck of the proper size for transporting modules must be secured. Furthermore, the width of the access road to a construction site can be a risk since modules cannot be moved onto the construction site when the road is too narrow. In a holistic view, transportation can face various risks, such as the heights of bridges and tunnels or right and left turns.

“Another risk is directly related to lifting modules on a construction site. If the position of a crane is not carefully considered and installed, a module can possibly be dropped and damaged.

“Building approvals and permits might take longer than traditional construction since modular construction is not a typical construction method and is still new to a building surveyor in a local authority and council.

“Also, if I am not mistaken, there are not many module manufacturers in Australia.”

Indeed, modular homes are rare in Perth—even in major regional areas, they are rare. With only 6% of the country’s construction market share, they primarily exist in remote or rural areas where it would be too cost-prohibitive to get traditional builders.

This raises a further question: Are there any reputable local modular builders operating out of Perth’s metro area?

The answer is a resounding yes.

Form Homes

We spoke to Form Homes, a member of Master Builders WA (MBA) and modular home builder based in Malaga that supplies fully finished homes on a turn-key basis in the Perth Metro area, about the nitty-gritty details involved in building a modular home.

Form Homes new projects manager, Simon Binta Sayeed, told The Property Tribune that the house-building process includes five stages— concept design, planning and design, manufacturing, and installation.

Form Homes – Design to lockup process

Form Homes - Design to lockup process
Source: Form Homes.

In the first stage, clients will work with Form’s in-house design team to craft a custom home design suited to their needs and budget. Here, a site visit will be arranged, preliminary codes will be performed, regulations will be checked, and the designers will sit down with the client, producing several design variations before settling on a final design.

After this, a full contract will be written up with a breakdown estimate for proceeding.
Alternatively, clients may also work with their chosen architect to draw up their own plans, from which Form will model, panelise and provide a full quote.

In the planning and design stage, the design is sent off to the shire for development approval, of which they have up to 90 days to approve. Upon receiving the go-ahead, the Form will proceed with final engineering, obtaining the Certificate of Design Compliance, Energy Efficiency Report, final modelling, and quoting, and returning to the shire for a Building License, for which they have up to 10 days to respond.

Next, the factory will commence manufacturing the home. As this happens, the slab or elevated sub-structure will be laid or constructed on-site.

The process finishes with installation. If Form is only producing and building the lock-up shell, it will take around three to five weeks for a standard single-story home.
For fully finished turn-key homes in Perth’s metro, the remaining finishes and fit-outs will require an additional three to five months.

What are modular homes made of?

The walls are made of Structural Insulated Panels (SIPs), which are created by sandwiching a layer of foam insulation between two structural facings. They are durable, energy-efficient, and significantly reduce construction time because they are modular and easy to install.

Simon tells us that there are two options for the walls of your new home. The first is their standard panels, manufactured by sister company Sipform.

Sipform standard fibre cement modular wall panels

Sipform standard fibre cement modular wall panels
Source: Form Homes.

“Our standard panels are 6mm fibre cement pressed on both sides with our insulation core Expanded Polystyrene (EPS) sandwiched. The surface is ready for immediate application of a textured coating without the need to install an additional fibrous weather barrier,” she said.

“Expanded Polystyrene (EPS) is currently used as a core material in 98% of all Structural Insulated Panel production globally. This decision on the choice of the core material is multifold; it demonstrates suitable compressive strength, stability, and rigidity, while as a high-performance insulation material, its performance remains rather stable over its entire lifespan.

“Where EPS is used to insulate buildings, it has a negative carbon footprint, saving far more in CO2 emissions than it emits during manufacture, disposal or recycling. The EPS core cuts building CO2 emissions by up to 50%. The energy used to produce can be recovered in less than six months.”

“The other option available is with Weathertex sheets pressed on the external surface and 6mm Fibre cement on the inside with the EPS sandwiched in between,” she continued.

Weathertex modular wall panels

Weathertex modular wall panels
Source: Form Homes.

“An Australian-made and extremely durable reconstituted wood cladding with incredible environmental credentials. Weathertex is available in a huge range of smooth, grooved or textured finishes, all boards come pre-primed and ready for painting. It is also available in a natural finish that can be stained and oiled to retain its deep colour or left untreated to age and grey off to a cedar-style patina.

“You can build on a concrete slab or an elevated flooring system. We can build double or triple storey houses with our product.

“For roofs, we can go trussed roof structure, for gable or hip and valley style, or at times use Bondor roof panels for Skillion or flat style roofs.

“All the panels, including internal and external walls, lintels, and sills cut to size, with all necessary fixings and accessories needed to assemble them, are included. The steel jointers and timber bottom and top plates are also included. Components are delivered cut to size and clearly labelled.

“Our system efficiently reduces delivery time, time-on-site, and costs by reducing waste headed to landfills.”

Are these forever homes?

Simon reiterates that these are high-quality, hardy homes that will last a lifetime.

“Our panels have a 50-plus-year lifespan. They are pest—and mould-resistant. They are built as forever homes and are strong earthquake—and cyclone-resistant,” she said.

Pros of owning a Form home:

  • Excellent sound absorption properties.
  • Maintains optimum temperature throughout the year with minimum heating or cooling.
  • A Healthy, non-allergenic environment.
  • Pest & mould resistant.
  • 50% quicker than normal construction.
  • Less demand for trade & labour.
  • Reduce transport & site deliveries.
  • Minimises excavation & disturbance.
  • Fewer delays from poor weather.
  • 30% less waste generation & disposal.
  • Save up to 60% on energy costs.

In terms of cons, Simon notes that SIPs are not usable as boundary or partition walls, and they are unable to manufacture curved walls.

Not taking her word for it, we consulted Association of Consulting Architects (ACA) member Brad Hooper, a veteran Victoria-based architect with over 40 years of experience.

“Modular makes sense in metro areas: Noisy construction processes can happen in a purpose-built factory isolated from the site which might be in a sensitive residential area. Similarly, time on site may be reduced, also mitigating detrimental impacts on surrounds,” he said.

He explained that modular buildings were built ‘inferior’ in the past out of need. Typically a feature of mining infrastructure, modular homes needed to be made cheaply and quickly without additional bells and whistles.

“Poor design quality is a factor and results as a necessary consequence of the pragmatic market these buildings were sold into, such as mining infrastructure.

“But Post Donga-ism is possible, and more interesting and creative buildings can be produced by architects. Similarly, transport considerations unduly influence design: a box can be a box, but look at what can be done with a bag of LEGO.”

Modular homes as an investment

A cursory online search on building modular in Perth evidences the extent to which most are ill-informed about how advanced modular construction is today.

You will find an array of opinions ranging from how modular homes are temporary shelters collapsing within a decade or two, unviable technology, and that a modular home will be felled by the first termite wandering onto its premises.

Importantly, many say that it is a bad investment, by virtue of being ‘modular’.

“Whilst modular construction techniques aren’t new, they’re still a new concept to a lot of people and until it reaches a critical mass, you’re going to find people criticising it just because it’s new to them. Just because it’s constructed on site doesn’t mean it’s a lesser quality,” said MCG Quantity Surveyors managing director, Mike Mortlock.

Mike Mortlock. Image: MCG Quantity Surveyors.

“Conversely, think of the manufacturing processes and quality-controlled processes in a permanent facility as opposed to what can be done on site!

“There are no reasons why modular buildings should suffer from a lack of performance from an investment stance when the quality and design are comparable side by side.

“One of the disadvantages with modular is that it needs to be transported to the site so that lends itself to designs with smaller room sizes, et cetera.”

“Most modular homes are now indistinguishable from site-built homes, so as an investment, it may pass hands with the construction technique not even being known or disclosed.”

Mike Mortlock, MCG Quantity Surveyors

“It’s only where the construction is obviously done in a way that leads to the notion that it was built cheaply off-site that should really impact upon valuations.

“Assuming there’s no obvious difference between the two, the only negative is likely to come from market acceptance, especially with lending institutions.

“There’s a distinct difference between mobile homes (which will often require lending from specialist financiers) and modular, though, so I can’t see it being a major problem with banks. That’s the only thing I’d be concerned about.”

We asked Simon if she had encountered problems obtaining financing for their builds.

“In our experience, obtaining financing for our construction projects is similar to any other conventional building project,” she replied.

“We take great care to ensure that our clients refrain from using the term ‘pre-fabricated’ when discussing our building methods, as this can create confusion with some banks who may not fully understand our unique process.

“We make the panels at our factory but assemble them on-site. This differs from other modular companies that mostly do transportable houses, making it challenging to gain approval from the council or finances.”

Not a panacea for the housing crisis

Modular construction will not solve the housing crisis. It may be a useful tool, alleviating supply bottlenecks, but the crisis operates through a myriad of complex and systemic problems, none of which have a quick fix.

“The approvals and compliance ‘industries’ are a severe hindrance to delivering buildings. There are simply not enough planners and building surveyors in the nation to check and issue permits which comply with the everyday increasing controls on housing,” Hooper commented.

“There are also critical shortages in design professionals: architects, engineers, surveyors, energy raters, shop-detailers and so forth.

“The finance providers also need a whack for being non-responsive in approving finance for anything other than four beds, two baths, two garages, wrapped in brick and sitting one metre from carbon copies on either side.

Dr Minunno echoes the architect’s sentiment that Australia’s obsession with large houses is a key driver of the crisis, resulting in a housing supply ill-suited to the unique needs of the nation’s diverse population.

“In my opinion as an individual, the housing crisis is exacerbated by the focus of the housing sector on the wrong product. It delivers huge houses with large front- and backyards instead of high(er) density buildings,” he said.

“Basically, it’s tailored for Australians’ taste, but the housing sector should support the students, labour and experts that are attracted to Perth from Asia, Europe, and America.”

Finally, Hooper remarks that longer-term rental leases should be up for discussion.

“Not enough discussion is being given to long-term leases for rentals; for example, a tenant could rent a serviced shell for, say, 10 or 20 years and then fit it out at their cost, or rent a completed dwelling for a similar period, thereby allowing institutions such as cooperatives to enter the building ownership arena.”

Longer-term leases exist in the Built-to-Rent (BTR) sector, but BTR accounts for a sliver segment of the private rental market.

“There’s also a discussion to be had around transient housing to allow resilience in climate events and shifting employment patterns. Which takes us back to modular.”



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