'Prefab': An International Snapshot

In part one of this series we begin by looking at prefab housing with a condensed snapshot of how the leaders in prefab housing internationally line up with the situation in New Zealand.

Sweden

The Swedish are said to lead the way internationally, with more than 80 percent of housing built with pre-fabricated elements. The ‘Swedish System’ of off-site housing construction incorporates:

  • Vertically integrated production, from forest to finish
  • Automation
  • Purposive or interventionist housing policy
  • Scale

The result is efficiencies, but also agglomeration – roughly 80 percent of homes in Sweden are built by companies that produce between 1 and 3 homes per day.

Japan

Roughly 15 percent of new homes in Japan are prefab, with a market characterised by:

  • Automation
  • Scale
  • High demand (depreciating house values)

US / Australia / UK

These countries can be lumped together, as being similar to New Zealand. A lower number (5 or so percent) of home building involves prefabrication. These industries seem to share similar features to the New Zealand housing market:

  • State driven surge in pre-fabrication post-war, ending before the 1970s/1980s
  • Consumer preference for ‘traditional’ methods and consumer choice
  • High cost building / low productivity in construction sector

Policy and weather

The scale and integration in Japan and Sweden are like nothing we know in New Zealand. In general terms, this can be put down to both population and policy.

Sweden and Japan have had a favourable policy environment to encourage and then sustain prefabricated housing.

Like Australia, the UK and the US, NZ has had instances of state involvement in prefabrication in times of high demand. Demand and cost conditions are driving a renewed interest in pre-fabrication in these markets (and in fact other markets like India and Malaysia) as both consumers and policy-makers are again willing to challenge pre-conceptions and preferences for cost and supply solutions.

The policy environment appears to be a key distinction in countries that grow pre-fabricated housing.

Of course, in Sweden and Japan the climate also encourages building inside at certain times of the year – a distinction less related to politics.

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