In March we talked about the state of the New Zealand housing market, sharing some developments that show it’s not all doom and gloom for house buyers and renters. In that post we touched on Housing Minister Phil Twyford commenting that the KiwiBuild policy, planning to construct 100,000 homes in ten years, was the answer to freeing up housing stock and increasing availability in the rental markets. The KiwiBuild policy isn’t without its detractors who say the target is unattainable and that it will take the construction industry “years to ramp up” its output. But could prefabricated buildings made off-site play a role? They’re quicker to assemble than traditional builds, so are they the answer to pulling off KiwiBuild?
PrefabNZ brings refreshing honesty to the KiwiBuild conversation
March saw a new protagonist come to the KiwiBuild forum in PrefabNZ – a non-profit membership organisation fostering off-site design and construction in New Zealand. In the build-up to their CoLab 2018 conference, PrefabNZ released their potentially game-changing ‘Capacity & Capability’ report which said New Zealand’s prefabrication industry could start delivering 70{95407e3839bb5037ad046b9122b99f7ba5d4c909945c65b4216bf6a898230cdf} of the KiwiBuild target of 10,000 houses per year as soon as 2020.
The report, and the throwing of their hat into the KiwiBuild ring, is the result of eight years of working towards a plan to achieve scale for the prefab industry. As such, the Capacity & Capability report shows how eager the prefab industry is to engage with KiwiBuild and use it as their launching pad to revolutionise construction in NZ and grow their relatively small 2 per cent slice of construction GDP. So eager in fact that many of the prefab manufacturers and builders surveyed for the report said they are willing to reinvest 8 per cent of revenue, and up to 20 per cent in some cases, to aid the growth required to produce 70,000 prehab homes annually for KiwiBuild.
PreFabNZ also envision economic growth for regional centres with prefab manufacturing companies located in Napier, Rotorua, Tauranga and Whangarei. While a quarter of NZ’s prefab businesses are in Christchurch, another quarter in Auckland and a fifth in Wellington, inclusion in the KiwiBuild policy would theoretically see expansion for the prefab companies in the smaller centres meaning more jobs for locals.
Honourable Presence from Twyford and Salesa
Twyford and Minister of Building and Construction, Hon Jenny Salesa were present at PrefabNZ’s CoLab 2018 conference, where they opened up an encouraging dialogue with the industry. Twyford’s enthusiasm for off-site and modular construction becoming an integral part of delivering KiwiBuild equalled that of PrefabNZ.
Speaking at the conference Twyford said, “KiwiBuild using mass procurement gives us the opportunity to build at scale, with contract work at volume, and with the certainty of multi-year contracts, which will allow firms to invest in the technology, the production processes, and design, and business models, that will transform your industry.”
The minister also made some honest admissions about the timing and targets of the KiwiBuild policy, saying the project will indeed take some time to “ramp up” and aims to produce 1000 homes in year one, 5000 in year two, and 10,000 in year three.
What this means for buyers and renters
We see the press for prefab as a good thing for the renters and buyers of New Zealand. One the one hand because it’s the best indication we’ve had so far of the KiwiBuild targets coming to fruition, in turn creating more housing stock. This means rentals become available as first-home buyers leave them vacant, and that first-home buyers will have more options with new builds appearing over the country. On the other hand, the nature of modular, off-site design and construction lends itself to producing more homes of different sizes, which could help meet the unsatisfied demand for one- and two-bedroom dwellings for young professionals and retirees.
We’ll keep you posted on any further developments regarding modular construction and KiwiBuild. In the meantime, here is some interesting reading regarding some of the pros and cons of building the prefab way.
Images:
Hive Modular – B-Line Medium by Jessee M under CC BY-NC 2.0