
A Small Solution to a Big Problem?
Could tiny and modular homes be a solution to labour shortages and housing affordability?
Image Source: Brett’s Timber and Hardware
As Australia grapples with an escalating housing affordability and availability crisis, coupled with soaring material and labour costs, residential builders are turning to modular and tiny homes as a potential solution. For the right clientele, this cost-effective and expedited housing option could offer builders a lower-effort, yet profitable, addition to their revenue streams.
Several companies have entered the modular and tiny home market, with long-established, family-owned Brett’s Timber and Hardware leading the pack.
Brett’s Timber and Hardware reports that an increasing number of builders are considering tiny and modular homes as a feasible alternative. “We’ve noticed a growing interest among builders in exploring modular and tiny home options as a way to combat rising costs and provide more affordable housing solutions. The efficiency and flexibility of these homes are proving to be a game-changer in the industry.
It is essential to distinguish between tiny homes and modular homes. Tiny homes, which are smaller than modular homes, are designed for mobility or transportability. They are often built on trailers or similar platforms, enabling them to be moved from one location to another. On the other hand, modular homes are prefabricated structures manufactured in factories before being transported to construction sites for installation. These homes can be customized to meet clients’ specific needs and preferences, ranging from small to large sizes.
Daniel Wilkinson, Partner at Xact Accounting and head of CFO Advisory, shared his insights on the benefits of modular and tiny homes in the construction industry:
As Australia’s construction sector faces the challenge of rising labour costs, modular and tiny homes have emerged as a cost-effective and efficient alternative for builders to offer their clients. By streamlining the construction process and reducing the required workforce, these innovative housing options enable builders to maintain project efficiency while lowering site labour costs—an essential consideration in the current economic climate.
Wilkinson also highlighted the profitability aspect for builders, stating,
One of the primary advantages of modular and tiny homes is their cost-effectiveness for both clients and builders. In comparison to conventional homes, these alternatives can be significantly more affordable to construct and maintain, making them an attractive proposition for clients seeking budget-friendly housing options. Furthermore, with modular and tiny homes being built in factories, the construction process is expedited, reducing both time and labour. This efficiency, combined with lower material costs, presents a unique opportunity for builders to secure healthy profit margins while still delivering affordable housing solutions to their clients.
Photos courtesy of Brett’s Timber and Hardware
The time-saving aspect of modular and tiny homes is another significant upside for both builders and clients, as the old adage “time is money” holds true in the construction industry. Due to the streamlined, factory-based construction process, modular and tiny homes can often be completed in a fraction of the time it takes to construct traditional homes. This shortened timeline enables builders to take on more projects, increasing their overall revenue, while clients benefit from reduced wait times and the ability to move into their new homes sooner.
Furthermore, the planning and approval process for tiny homes is often less cumbersome compared to traditional granny flats, as they frequently do not require the same level of council approvals. This can lead to additional time savings for both parties, as the red tape associated with planning permissions is significantly reduced. Consequently, the expedited construction and approval processes for modular and tiny homes not only result in cost savings but also enhance overall project efficiency and satisfaction for both builders and their clients.
Aside from their cost-effectiveness, modular and tiny homes address Australia’s housing availability crisis. Given the shortage of affordable housing options, these homes provide a flexible and economical solution that can be tailored to meet various clients’ needs. As they do not necessitate the same land area as traditional homes, modular and tiny homes can be constructed in a broader range of locations, increasing accessibility for those with limited access to larger plots of land.
Modular and tiny homes offer numerous benefits for both builders and clients, making them an increasingly attractive solution in the face of Australia’s ongoing housing affordability and availability crisis. Their adaptability, affordability, and sustainability make them an ideal choice for builders seeking to deliver more accessible and affordable housing options for their clients. As the challenges of rising costs and limited housing options persist, now is the perfect time for builders to capitalise on the advantages of modular and tiny homes and actively incorporate them into their business strategies.
Reach out if you’d like to discuss the advantages of tiny or modular homes and other ways of improving your margins. You can also find more at https://bretts.com.au/brettsmodular or for tiny homes on wheels https://bretts.com.au/tiny-homes.
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