Could Container Homes Bring Australia’s Housing Prices Down?
Sydney’s average house price hit $1 million last year. That’s 12.2 times the average middle income family’s annual income. For the Average Joe, it would be impossible to get a mortgage on that. Prices are going up as well, with little sign of slowing down. While for those that own their own home already that’s great news, but it’s a real problem for those trying to get on the housing ladder. There may be a solution in shipping container homes.
When most people think of property developers they tend to think of someone who would try to make as big a profit as possible. If your typical property developer ran into shipping container housing as a really cheap way of building a new home in Sydney, they’d see the margins they could reap from building a luxury home on the cheap and potentially double their profits. Not all property developers are quite that cheeky.
Where a new-build home in Sydney can cost in excess of $2000 per square metre to build, some have calculated that a fully-fitted shipping container home can cost $1200 per square metre, a 40% drop in costs to build. Some developers have seen this saving and instead of absorbing it into their profits have started to sell homes at a price that ordinary people can afford. While this may rile profit hungry developers, and those who own homes who like the huge rates of appreciation their homes have, it does mean that the property market could be rebalanced in favour of everyone being able to afford a home.
Luxury to cheap as chips
While someone looking at this blog may be thinking that shipping container homes are just boxes for poor people, this really isn’t the case. Excluding the cost of the land on which it is built, a developer can build a five bedroomed shipping container mansion with a double height living room and open plan living for as little as $300,000. Add on 30% profit to keep your investors happy and you can sell an extremely luxurious home for $400k.
According to one shipping container home builder who’s being deluged with potential customers asking them to build a new home, every third or fourth call they get is about a shipping container mansion. While the rest are cheap as chips homes, it does show that those who want to exploit the economies while still spending a few bucks on a very nice home have caught on.
If you are selling a $1 million home and want to live mortgage free yet have a similar amount of space, you can build a $400,000 shipping container home and fit it out with the very best in luxury. Marble kitchen tops? Hardwood flooring? Solar reflective glass windows everywhere? You can do all that and still perhaps invest the profit from your last home in a rental property elsewhere.
At the lower end of the market, it is also possible to build a home of the equivalent size to a two bedroomed apartment for $130,000. While modest in size it makes property accessible to those who would not be able to even think of buying.
Lower end shipping container homes may be cheap to build but they aren’t shoddy boxes. Built in factories to exacting standards, they are well insulated and designed to minimise energy costs throughout the year. Looking at one of these from the outside one might not even be able to tell that it is a shipping container home either, with outer wall insulation and cladding and perhaps a sun shade outside the front for an added bit of style. Some designs even come with green, flat roofs that both take CO2 from the atmosphere and insulate the home even more.
Granny flats and extensions are extremely affordable. If your folks need less space yet you have plans for a family with your partner, then you could consider building a granny flat out of a shipping container home, move Mum and Dad into it and take the rest of their home for yourself. Keeps it in the family, and for around $100,000 you can get a far better outcome for everyone than perhaps talking them into selling up and splitting the capital with you for an apartment for them and a smaller place for you. You can also repay them the debt you owe them in bringing you up by helping them through their autumn years.
NSW ‘Affordable Rental Housing’
In 2009, the NSW state government became aware that housing prices were headed for the stratosphere and foresaw a property cost induced housing crisis. They instituted a new set of regulations that permits someone who owns a residential property on 450 square metres of land to build a small home on their land.
Under the rules the new build must not be more than 60 square metres in size. Two 40ft shipping containers take 56 square metres so fit perfectly in the regulations with a little breathing room.
It does not state whether the home has to be one storey or two, so two containers can be laid side by side or they can be stacked for those who want it that way too. The regulations have primacy over local councils’ regulations and this means that people who have the space can tell the council they are doing it – not go cap in hand and begging.
For parents sick of their offspring living at home in their wild 20’s this could be the answer. It gives their children the space they need to act as adults, and for others who may want a secondary income stream they can rent these spaces out to students at a reasonable market rate and very quickly see a good return on investment.
Build on a postage stamp?
Shipping containers have a very small overall footprint so, with planning permission, can be stacked on a tiny plot between two other existing homes or offices in an already built up area. You don’t have to have your living room and kitchen on one floor – how about your kitchen on the ground floor, living space on the next and bedrooms above? Shipping containers are designed to be stacked up to eight high, as long as their corners are placed one above the other. This means that with a little imagination you could have a 2.43 metre wide home that is nearly 24 metres high – luxury living on a postage stamp of land…
The cost of land is always a problem when it comes to high costs of living in a city such as Sydney. Stacking high is one of the reasons that the skyscrapers of New York City emerged – to maximise the amount of living and work space available on a limited amount of land.
Why is it so cheap?
There are several reasons that shipping container homes are so cheap to build. The first is that they are prefabricated in a factory. Under cover and away from the vagaries of the weather, a shipping container can be cut and fitted out with utilities and even most of the stud walls, insulation and windows, with few if any delays brought on by the environment outside. In a factory setting, specialists will work on set tasks and will do these extremely quickly unlike a general builder who may have to do various tasks from the foundations to weatherproofing the construction. The upshot is that there are fewer man hours going into the construction and this saves a considerable amount of money.
While the design and construction takes place in a factory, the foundations can be laid. On a typical apartment block or detached house, one would need to lay a concrete pad for the entire footprint of the home, and this costs a lot of money. Shipping containers, however, only need a series of concrete piles that are drilled into the ground and set in just a few days. Some estimate that the savings in only putting piles into the ground can be in the region of $40,000 as against the cost of the foundations for a traditional home.
Once the pilings are in place the prefabricated blocks of the home can be shipped to the site and the home can be in place and weathertight in just a few days. While the roof, inner and outer decorations and landscaping need to be put in place before the new residents move in, the shipping container can be built in three months, including the work in the factory instead of up to a year for a traditional build. These savings can be passed onto the new homeowner.
Land costs are the chief added expense to the cost of the fabric of the home. Land faces the same inflation pressures as the homes that sit on it and for a central location in Sydney or Brisbane the costs will add a significant chunk to the overall cost. The answer as ever is to either build high and narrow or to live outside the main housing bubble area. You will still save hundreds of thousands of dollars in building your grand design, and can live in comparable or better luxury than any neighbouring property for a fraction of the cost. That’s no bad thing for someone who wants to have their cake and eat it too with regards property!
Build an affordable home without paying an arm or leg
Here at Gateway Container Sales we can help you with almost any construction project you can imagine and can provide the resources to help build your housing project big or small. We can put you in touch with our network of architects and designers who can guide you through the pros and pitfalls of container housing, and help you develop your ideas from paper, to the end of the project. Give us a call today!