Is Innovation in Australian Project Homes Just Lipstick on a Pig?

The project home market is the most consistent, least complex construction sector in most modern and developed economies.

So why doesn’t the Australian project home sector adopt modern methods of construction? Robot bricklaying doesn’t count either. Nice tech but definitely lip stick on a pig.

House and apartment builders get to deliver pretty much what they want. The customer doesn’t have any real choice (calm your pastels angry Colourists). Design is not driven by brand standards or commercial or operational space requirements – just site optimisation and cost.

Only peer to peer competition dictates offering bells and whistles to drive up added value and profit. Customers can’t get enough of it.

So why are they not leading the charge in off site construction like elsewhere in the world? Standard design, scale and simplicity? If it ain’t broke don’t fix it?

At a recent seminar we met with a project home builder (the names have been changed to protect the innocent – lets call him Bruce) and they told us countless stories about how the company drove design innovation, standardisation, commonality but couldn’t see how prefab, or anything past trussed frames, could work for them.

They’d devised standard components, kitchen designs, benchtop sizes, cabinetry savings. They’d also driven a standard sized and spec wet area to suit panel sizes and reduce wastage.

But, they’d never considered using a prefabricated bathroom because they didn’t have the scale. They’d had a look at CLT and closed panels but they were too expensive and prefab bathrooms were for student housing and hotels and had no place in the project home market.

Really?

So how many homes did Bruce build in 2016?

160 completions for 2016 and in 2017 they are projected at over 180.

Now we are not mathematicians. (We got our maths degree when we gained medical doctorates empowering us to diagnose professional sports injuries through a large television).

However, even without taking our shoes and socks off, Bruce’s scale perception didn’t add up.

Take Bruce’s 2017 projected 180 homes a year. On average each home would have a master bathroom, an ensuite, a powder room and a laundry. 4 wet areas per home.

4 x 180 = 720 wet rooms a year. Isn’t that quite a big number?

Indeed. That’s 60 per month; 14 or 15 per week.

Wow. Most prefab suppliers would jump at the chance to build that many units on a regular basis. The nirvana of a secured term contract.

And Bruce said he had a signed up 3 year order book.

Are you serious Bruce?

540 houses?! That’s a potential order for 2,160 prefab wet areas.

And how many Bruces’ are there out there in suburban and regional Australia? Quite a few.

House building, or specifically, project home building, is the most consistent construction activity in Australia. Probably most other countries too. It gives genuine scale.

Don’t try and tell us that what Bruce and other project home builders do is unique either. That’s utter tosh.

The point of difference in the sales suite or display home doesn’t extend to the shape of the laundry cupboard.

House builder’s need to embrace the new revolution and people like Bruce are the key. This is why…

If you can reduce the build time of your houses and deliver quicker you can build more houses with the same resources. You could make more money and deliver more consistent quality and reduce after sales care costs (defect visits).

And, about that waiting list Bruce.

Do you have a three year waiting list because you can’t build fast enough or because you’re happy with that much pipeline?

I bet your customers aren’t happy waiting 36 months to move in.

Bruce needs to innovate. He’s already trying.

The smaller scale innovators will always be in demand because a proportion of customers are ultimately uncomfortable dealing with huge businesses where they can’t see the top of the tree.

Businesses like Bruce’s will survive because they are agile but Bruce think it’s just a matter of time before he gets swallowed by a big fish. He’s wrong.

Bruce is nearly a fast fish.

Bruce. Find another Bruce or two. Pool your capacity. Pool scale.

Imagine going to the market with 2,500 wet areas a year? That is real buying power. Imagine going with 7,500!

Give the customer those ‘value adding’ colourist consultations for the bedrooms, hallways and living space but keep them out of the bathroom so you can use prefabricated wet rooms and pass cost savings onto the customer.

You’ll also deliver houses quicker and make your customers really, really happy.

(Image credit: Parker Building Supplies)

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