As property prices continue to rise, builders, developers and governments are all looking at ways to produce homes that are stylish but still affordable. There are so many reasons Australian real estate is among the most expensive, relatively speaking, in the world. The principal reason in my opinion are the myriad of levels of government red tape and semantics around producing a block of land. I have a project in Perth that so far has taken nearly four years just to get to an outline development plan approval stage. And now we have to go through another similar series of procedures to get a subdivision approval. It will take more than six years to go through the regulatory hurdles just to create land that people can build on. In Texas, USA, the same process takes about nine months – their land prices are about half of ours. I don’t see the industry or the self-interested government bodies giving up their power and changing any time soon, so that’s good if you own property and bad if you don’t.
There are major advances being made on the construction side, which will in time mean much less expensive homes. It is now possible to fully manufacture a modular home, or even apartment complex, off-site in a factory in a matter of weeks, have it transported to site and complete construction in just a few months. The quality of the product is first class and it would take someone skilled to realize that the construction is not something conventional. The technology has been used in Melbourne to build apartment blocks of 30 storeys. In 2012, the Chinese built a 30 storey hotel in just 360 hours, check this 2.5 minute video:
The very same technology is being used right now to construct a 202 storey apartment block – city! – in a staggering 6 months – again in China.
So while there aren’t yet significant cost savings, the massive difference is in the time it takes to complete the product and bring it to market. Or in remote locations, where it is hard to keep labour on a site, having pre-fabricated homes, solves a number of construction issues.
A good Australian example of this is my project at www.daylesfordplace.com.au – Have a look at it. This is the future of housing – and your investment properties – and it’s here right now.