Fletcher Building plans to invest “tens of millions” of dollars in a ‘panelised’ housing plant in South Auckland that could churn out two houses a day. The announcement comes as the government’s KiwiBuild programme calls for the establishment of new prefabricated housing capacity.
However Fletcher Living CEO Steve Evans says the houses won’t necessarily be any cheaper than a traditionally-constructed home – at the beginning at least.
The Fletcher plant will initially be capable of pre-building some 500 houses a year, with annual capacity to grow output quickly to 1,000 homes, Evans says.
The plant will specialise in two-storey duplex and terraced homes. They will be constructed over 22 weeks in the factory and then erected on-site within a single day, with all wall plumbing and electrical wiring already fitted in a weathertight frame, Evans says.
“In a year’s time, I expect we will be producing hundreds of homes, a couple of homes each day.”
Last year, Fletcher Living announced it had put up a prefabricated duplex home in three days. Now it says it can erect a house in a single day. Watch the video here.
“In a year’s time, I expect we will be producing hundreds of homes, a couple of homes each day.”
The government’s KiwiBuild affordable housing scheme aims to build 100,000 affordable homes over the next decade. While Fletcher is “very interested in participating” and has “made [its] feelings known to the government”, KiwiBuild CEO Stephen Barclay hasn’t made any decisions, and Fletcher is unlikely to be the only contender.
The KiwiBuild secretariat released an Invitation to Participate (ITP) document last month, seeking proposals for investment in prefabricated housing factories.
The New Zealand Superannuation Fund appears likely to lodge a proposal. Chief executive Matt Whineray says the sovereign pension fund has been “doing quite a lot of work about where the opportunity might sit in that spectrum”.
Any investment in a pre-fab housing factory needed to stack up commercially, he says.
“We haven’t landed on where we are with that, but owning land and developing homes on it is one type of risk,” says Whineray, referring to the Super Fund’s involvement in housing development at Hobsonville, in west Auckland. “Owning a factory that produces homes that can go on that land: that’s a quite different type of risk.”
Discussion of the Super Fund investing in a central North Island prefab housing factory first emerged in official papers earlier this year.
“What sort of pipeline do you need to be able to invest in that type of factory? People have talked about the scale, about what number of houses per year do you need to warrant investment in the factory? That’s several thousand,” Whineray says.
“So that says: what’s the pipeline over a number of years to spend X million dollars to bring this technology in and establishing the factory and getting all the suppliers and sourcing? We haven’t really established that that’s the way for us to go.”
Both Evans and Whineray stressed that low-cost home construction was only part of the puzzle. Access to sufficient land at an appropriate price is also key.
“We wouldn’t want to rely 100 percent on supplying to KiwiBuild.”
Fletcher aspires to be a “key player” delivering KiwiBuild homes, but potentially, only one third of the output from the new South Auckland plant might go to KiwiBuild projects, Evans says.
Fletcher will supply its own developments in the early stages. Once it had perfected its systems it would start selling to other customers, Evans said.
“So we will still be doing our own open market housing. We wouldn’t want to rely 100 percent on supplying to KiwiBuild.”
Evans says the company is sufficiently confident of demand for panelised, pre-constructed homes to have ordered the equipment for the first phase of the factory development. There was enough land at its planned South Auckland site to double capacity as demand allowed.
Evans says pre-fabricated doesn’t need to mean kitset. The new panelised homes are able to be customised both inside and out with customers’ preferred colour schemes, claddings, and choices of about a dozen different internal layouts.
Evans said the company had worked extensively with Auckland Council on an “accelerated permissions pathway” over the past 18 months.
While homes produced in the current “pilot phase” are likely to cost about the same as a house constructed using normal, on-site building techniques, costs should fall over time, Evans says.
