Westpac NZ is the first bank to launch a dedicated mortgage product aimed at helping get Kiwis into prefabricated homes.
The introduction of Westpac Prebuilt follows a successful nine-month test pilot, which involved builders and customers from Albany to Invercargill.
“We think homes manufactured offsite are crucial in addressing two key systemic issues: our housing shortage and a lack of affordable construction options”, says Westpac NZ Head of Home Ownership, Mark Dunmore.
“For the first time, we’re offering a simple and streamlined process for prefab buyers and builders, which will help put more New Zealanders into affordable and well-designed homes.”
Built in factories, prefab homes can often be constructed more quickly and cheaply than a house built onsite, and without weather delays.
Industry body PrefabNZ estimates a prefab build can shave up to 15% off total construction costs and up to 60% off build times.
However, borrowing for a prefab home has often been a frustrating experience, because of the complex issues around security of the house while it’s being built in a factory.
“Our new way of funding essentially means we have security before the house is delivered, which removes much of the uncertainty for buyers and builders partnering on a build,” Mr Dunmore says.
The first prefab house from the pilot is currently under construction in Huntly, while a number of other homeowners have been preapproved for lending.
Albany customer Russell Pickering was impressed by the designs on offer. “They certainly don’t look like some of the modular homes of years gone by,” he says.
“The builders were able to offer us pretty much anything we wanted to include.”
Builders who participated in the pilot are optimistic the new model will eliminate the time-consuming process of writing up bespoke financing contracts, and let them get on with building.
“We’re seeing fast-growing demand for transportable homes. Building in a controlled factory environment simplifies the process, which is great news for both builders and home buyers,” says Built Smart General Manager, Cameron Beverland.
PrefabNZ’s 2018 Capacity and Capability Report estimated 4,000 prefab homes would be built in New Zealand FY19 and a further 7,000 in FY20.
Mr Dunmore believes the market for prefab homes will extend well beyond first home buyers in the next few years.
“We sense the market is reaching a tipping point in terms of design, quality and production capacity,” he says.
“From people looking to build on remote or hard-to-access sites, to families seeking brand new, warm and well-built homes, there are options available for everyone.”
PrefabNZ chief executive Pamela Bell says Westpac’s financing model simplifies the most complex part of buying a transportable home.
“The type of support being offered through this new programme has never been seen in New Zealand. We expect it to be a hit with buyers and builders.”
Westpac Prebuilt is available to customers now. Standard lending criteria for constructions loans apply.