Swedes Hand Out Prefab Lesson as Housing Crisis Deepens

We don’t need to reinvent the wheel, we need to harness it to achieve the goals of the National Housing Accord. Master Builders Australia has forecasts the nation will fall 13.8 per cent short of the 1.2 million new home target between now and mid-2029. Construction productivity is the albatross around the industry’s neck, declining from a 2014 peak of 119.79 to a new low of 98.07 in 2023, according to Statista’s Labor Productivity Index for the construction industry. Although there are many hurdles to clear—unions, red tape and approval times—there are changes and innovations construction companies at home and abroad are making to increase supply, including a number of emerging prefab and modular home companies joining those already established in the space. AV Jennings has signed a deal with prefabricator Pro9 and is establishing a manufacturing plant on the Central Coast to build homes virtually indistinguishable from traditional housing. Meanwhile, Sweden may be known as the home of flatpack furniture, the fifth-largest country in Europe by area has been making prefab homes for more than 100 years. As Australia looks for answers to the undersupply crisis, there are lessons to learn from Sweden with a little help from an Allen key—or at least a giant robotic arm. The industrial revolution of the construction industry began in Sweden in the 1920s. Today, prefab homes have a 90 per cent share of the home market, the majority built by small to medium firms. Prefabs in Sweden also have a 20 per cent share in multi-storey housing, provided by 15 companies. ▲ Boklok, a joint-venture between Skanska and Ikea, has been building homes since 1996 in Sweden and the UK for people with “regular incomes”. Stanford University adjunct professor Jerker Lessing is an industrialised construction expert from Sweden. “I have spent the last eight years as head of research and development at a housing company, a developer using industrialised construction and modular principles to achieve some really high quality homes,” Lessing told the Building 4.0 CRC Roadshow in Brisbane this month. “It’s a joint venture between Ikea and Skanska. We have delivered 15,000 homes over the last 20 years.” Lessing says the move to modular homes in Sweden was prompted by a housing crisis, strong urbanisation to the cities and a shortage of quality homes. “The government took an initiative in the national building bureau and developed a series of standardised housing types,” Lessing says. “It was given out for free or at a very low cost and was applied to traditional construction sites, and they achieved very good quality and a much shorter lead time. “Some companies picked that up and thought, ‘Why don ’ t we manufacture some of these building parts in factories? ’ . “I recently saw a list of 10 companies that were active at that time and at least four of them are still active today.” ▲ The 20-storey prefabricated cross-laminated-timber Wood Hotel at Skellefteå, 770km north of the Swedish capital Stockholm. In the 1960s, a housing shortage rose again and the Swedish government launched a mammoth housing program. It aimed to build a million homes in a 10-year period “and that was in a country that had 7 million inhabitants at the time,” Lessing says. “That was a big challenge of course and sparked a lot of innovation and development into building systems, production methods and machinery in order to make this happen. “A simple recipe has emerged out of this and we see success by following three simple steps. “Start with the customer and market—dig deep to understand their needs, priorities and costs and price levels. “Use that as input into product development and then create the production system that is suitable to deliver.” However, in Australia many companies have invested millions of dollars in modern construction methods that are yet to truly catch on, creating opportunities for smaller firms, Lessing says. “Starting at number three—investing a lot of money in super cool technology, super cool equipment, building huge factories that can build anything for anyone—is very difficult and very complex,” Lessing says. “One very important point is to specialise, because it is really hard to be really good at too wide a variety of concepts and systems and products. “Small and medium-sized companies are the most successful in this development because they aren’t too wide in their market presence.” Over a century, Swedish developers learned these lessons the hard way. ▲ Jerker Lessing speaking at the Building 4.0 CRC conference in Brisbane. Increasing the housing stock by a million homes in a decade appears a great achievement but it came at a cost to the people. “The goal was reached but it wasn’t really success because it was really weak in a very important ingredient and that was customer focus,” Lessing says. “It created large-scale housing areas that were not appreciated by the customers and today we still live with that and the social problems that have come.” Lessing says if we want Australia ’ s plan to succeed there are lessons from Sweden to take onboard. “Industrialisation is not only about the production method, it is a much broader concept,” Lessing says. “It takes time to get it right, it’s not a quick fix. It’s not only buying prefabricating models and hoping that will solve the whole industry’s issues. “We need to have a customer-centric approach otherwise we might end up with results that weren’t really what we wanted. “It is not a one-act show, it has to be a collaborative effort; developers, architects, engineers contract suppliers and so on. “Together with academia and research it can get even stronger.” Just make sure to start at step one. You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

Swedes Hand Out Prefab Lesson as Housing Crisis Deepens

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