Do modular homes deliver long-term value compared to traditional builds?

The cost and construction time may both be lower for modular housing, but will the finished product be worth more in the long term?

It’s always one of the first things people ask when they start considering modular construction, says property advisor Uwe Jacobs of Property Friends, who’s also a co-founder of modular and prefabricated home project management company Factory2Key.

“But it’s no different from a traditionally built house,” he says. “Builders don’t manufacture roof trusses themselves, or windows, so this is just the next level of the same process.

“People may still be a bit nervous in Australia, only because it’s not so entrenched or known here, but overseas, people have been using these methods for a very long time.

“And, as well, it’s a much more reliable build, under controlled conditions, so the likelihood of any defects is much, much less, and so it will hold its value even better.”

Being built right is indeed the best guarantee of a home’s long-term appreciation in value, agrees Dale Connor, the chief executive of Built Living, which manufactures apartments off-site at an industrial scale.

“Given the tightly controlled factory environment, modular homes can be built with fewer defects and stronger quality assurance from the outset,” he says. “With greater efficiency and control over variables such as weather, moisture and temperature, modular can deliver housing up to 20 per cent cheaper and 50 per cent faster without compromising long-term performance.

“We’re bringing advanced digital technologies to Australia, creating a fully integrated manufacturing-to-assembly model, using high-quality modular and precast components, that does not sacrifice quality for affordability – it delivers on both.”

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The federal government is now investing millions in expanding modular and prefabricated housing – also known as modern methods of construction (MMC) houses – while Landcom, the NSW government’s land and property developer, is working on a pilot project of nine two-storey modular terraces in Western Sydney to demonstrate to the industry how it can be done.

“It’s about de-risking the process for others, and showing how it can take only 50 per cent of the time and save 20 per cent of the cost,” says Landcom chief executive Alex Wendler. “We want to be at the forefront of progress, and we’re now on the cusp of many people embracing it and being happy with it.”

Rawson Homes is one of the few volume builders taking on modular housing, and finds that values depend on several factors – but the method of construction isn’t one of them.

“Ultimately, the value of a home is driven by design, location and build quality, and not how the home is built,” says chief executive Paul Hendry. “There certainly has been a stigma if the product looks or feels different to a traditionally built home, which can change market perception.

“But with us, for example, neither design nor quality is compromised, so the consumer could never see the difference. In Orange, we built two homes side-by-side with different construction methods, and even the owner of the MMC couldn’t tell the difference. Because there is none.”