Westpac runs trial to bankroll prefab homes

Westpac change aims to improve housing affordability for Kiwis

Westpac is changing the way it funds prefab housing to boost the number of affordable homes.

The bank — which yesterday revealed its half-year cash earnings in New Zealand were up 4 per cent to $482 million — is launching a new pilot programme where it will be easier for builders of prefab houses to get finance.

The trial will finance the construction of six prefab homes in Auckland and Waikato and if successful it will be rolled out across New Zealand.

“This is a major step towards improving home affordability, especially for first home buyers,” said Westpac NZ chief executive David McLean.

“It will move prefab housing from sitting in the too-hard basket to being a viable choice for lots of Kiwis.”

McLean said the way houses were built in New Zealand — where wood gets delivered to a property and a dwelling is constructed — was “quite out of whack with most developed countries around the world” where prefabrication was more popular.

The banking industry hadn’t helped, he said, because lenders tended to provide finance only once a prefab house was installed on site, but on a traditional build it would advance progress payments throughout a project.

McLean hoped the bank’s pilot would make borrowing for a prefab house “streamlined, simplified and stress free” for builders and buyers.

Citing industry figures, he said prefabrication could reduce construction costs by 15 per cent and building time by up to 60 per cent.

Source: NZ Herald