LOOKING down the production line at Moduform’s Canning Vale facility provides a clear view of just why transportable housing is proving an attractive solution for commercial and residential markets in the north-west.
The affordability of prefabricated concrete transportable housing compared to in situ construction has long been a drawcard for regional and remote developers, with speed of delivery an added bonus.
And it’s a sector for which demand is growing significantly, due to the rapid expansion of the resources industry.
Estimations for housing requirements in the state vary with suggestions between 600 and 800 new dwellings will be required for each of the next five years in Karratha alone. Others estimate that three of the state’s major projects coming online will generate demand for 2,000 houses in the next three years.
Long-time industry players such as McGrath Homes, which was started as a family business 40 years ago and is owned by Nomad Building Solutions, and TR Homes, owned by ABN Group and in business for more than 35 years, were among only a handful of players five years ago.
Now there are more than 30 businesses competing in the sector – from Western Australia, the eastern states and overseas – each vying for a piece of the commercial and residential prefabricated accommodation action.
Established in 2009, Moduform is one of the more recent additions to the market. Business partners Michael Brain, Stuart Tuckett and Grant Farrow believe they have found a niche in the market with their multi-storey studio apartments targeted at white-collar mining workers.
High residential rental rates in the north are attractive to developers, who in times of short land supplies look to maximise land use in the Pilbara. Moduform has focused on growing its capacity in high-density (two- and three-storey) developments to take advantage of that.
They add to their pitch with speed of delivery (they can install 14 fitted-out, one-bedroom, one-bathroom units in 14 days), while the buildings have an 8-star energy rating and provide improved soundproofing thanks to the concrete materials and insulation.
Moduform will complete its first project next month, a complex comprising three blocks of 10 studio apartments and one block of 14 resembling townhouses in its two-storey format; these are being built for a private developer.
The company expects its second project, in Port Hedland, will be completed in April next year.
“Demand is growing for quality accommodation up there, and with limited land supplies multi-storey development is allowing maximum use of a scarce resource,” Mr Brain said.
With the company’s full capacity of 200 units a year yet to be met, Moduform is looking to expand through private and commercial developments, and ultimately its own land developments.
Other longer-term players in the more general commercial and residential transportable housing market have plans to expand capacity in light of growing demand.
Aussie Modular Solutions, known as Aussie Portables for 20 years, has established 300,000 square metres of construction space in the Perth metro area. The company currently turns out 3,000 modules a year. (Three modules make a four-bedroom, two-bathroom house.)
Currently, 80 per cent of that production goes to the commercial/mining market and the remainder the residential market, but AMS business development manager Louise Daniels said the company hoped to get the ratio to 60/40.
More players in the sector provided great competition, Ms Daniels said, with tenders now attracting between 30 and 40 potential proponents.
TR Homes general manager Dale Putland said at an average rate of 10 weeks construction for a home, the business had the capacity to construct 300 homes a year. Currently, however, capacity was running at a third of that production level.
He suggested a number of reasons for that, including: global financial and local interest rate pressure; outdated bank perspectives on lending viability for transportable homes; and market share pressure associated with land shortages in the north-west.
“The issue is, though, there is a shortage of land being released in the north-west, which is restricting builders from having enough to make it work for them. We are finding that and feeling that,” Mr Putland told WA Business News.
“I have been in the industry since 1992. Back then there were half a dozen transportable home players and only a couple of key guys. Now you look at the industry and there are probably two or three coming on every year and 20 or 30 now.”
McGrath Homes business development manager Dominic Youel said that, based on the projections from mining companies in the north in terms of required accommodation over the next five years, there was enough work to sustain all players.
“That doesn’t make it any easier, the market is very competitive at the moment,” he said.
Mr Youel said one of the major changes in the industry was when large residential builders – such as Len Buckridge’s BGC, Summit Homes Group and Dale Alcock’s ABN Group – got involved and lifted the bar in terms of quality, introducing architecture and design elements to transportable homes.
“That brings in current thinking, design and innovation,” he said. “Prior to that, transportable homes were typically uninspiring in appearance and fit-out and square and rectangular in shape; literally boxes.”
Design is TR Homes’s niche offering, along with its loan facility enabled through ABN Group.
It also has diversified into ‘granny flats’ and is continuing its focus on the farming market, which was where the business started 40 years ago.
Mr Youel said McGrath was targeting growth through both the residential and commercial markets, with the latter very price driven.
McGrath sets its prices according to quality in the residential market, and Mr Youel said its best ammunition in the market was a reputation built over the past 40 years.