Not everyone wants to chat policy or per-square-metre rates before they’ve had their coffee, but this one’s worth taking a quick look at.

The feds threw $54 million at modular in the last budget. Commonwealth Bank’s been making noise too, saying prefab could be the fix for housing supply issues. Sounds like good news, right?

Only it’s not really translating on-site. We’ve been talking modular for a little while now on The Good Builder, but on this week’s pod, Pete summed it up straight,

“I just don’t think we’re there yet with modular… it is just too expensive.”

Let’s break it down.

What’s the story?

Pete and Aaron dug into the latest developments on Wednesday’s Daily Dose podcast. The government’s cash splash was meant to push modular into the mainstream. More homes. Faster builds. Less pressure on tradies.

It’s a great idea, in theory.

As Pete pointed out, for your average detached home, modular just doesn’t stack up.

“In Queensland or Victoria, you’re looking at $1,600 to $2,000 per square metre for a simple detached home. But modular? Rates can be well north of two and a half. Three, four hundred dollars more per square metre. Then you’ve got transport and crane costs, sometimes that’s another $65K to $100K just there.”

So yeah. Not exactly a bargain.

Why it matters

There’s this idea floating around that modular is faster and cheaper, but on the ground, builders aren’t yet seeing those wins.

“You might save three or four weeks on a home, but that’s it. It’s not going to make a huge difference for the average everyday buyer.”

That tiny time saving doesn’t cover the higher cost, and unless you’re building on an island or running social housing, it’s hard to justify the spend.

If modular’s ever going to be a real option for volume builders, it’s got to work in the mass market.

The problem is, right now, it doesn’t.

What do we know?

We’ve touched on this before, but one of the biggest blockers is finance. Even though CBA is backing modular publicly, Pete’s had a look behind the curtain, and it’s not that impressive.

“I’ve actually seen the financing sheet for CBA. They’ll only release 60% of the build contract or 120% of your land value, whichever’s lower. So if you buy a block of land for $500,000, they’ll only give you $100,000 for the build. That’s not even close to covering it. Builds are going to cost $250K–$400K easy.”

So until the banks catch up, builders are expected to foot the bill upfront. And that’s not how most of us roll.

There’s a whisper that NAB might be moving further down the track with better financing. If that’s true, it could shake things up, but it’s still early days.

What’s being said?

There’s still energy around modular. Builders want smarter, more efficient options, and innovation is bubbling away.

Pete did give a shout to one mob doing something different,

“Except for ZuruTech… they’ve got homes way above standard for about $500 a square metre. That’s stacking up to be potentially a game-changing solution.”

ZuruTech’s got the scale, the systems, and a massive factory. If they crack the market, modular could finally be what the government wants it to be.

But until that happens, Pete reckons,

“I can’t see it affecting any of the home builders in terms of taking their market away.”

What should you watch for?

If you’re in the game and wondering if modular’s worth a look, keep your eye on:

• What NAB does next with finance
• Whether ZuruTech or someone like them launches locally
• If government pilots start showing actual results, beyond the next election.

Because once one of those above points click, the picture could shift quickly.

Final thought

Modular looks good on YouTube, Pinterest, and Instagram. It also saves site footprint and waste. It’s slick, and it might be better for the environment in the long term, but it’s not much use without the system to back it up.

There’s still a lot of potential, and we’ll keep covering it as that part of the market evolves. As for right now, it’s a stretch for most builders.

What would need to change for you to take modular seriously?

Let us know.

We’re not at all affiliated with Anchor Homes, but you might be interested in watching.

Author: The Good Builder

The Good Builder is a media platform that provides news and insights for Australia’s home building industry. From exclusive stories and curated insights to bold industry perspectives, we deliver the news and updates that keep builders, suppliers, and the entire home building industry inspired and ahead of the curve.