To reduce the risk of higher wages and labour shortages, Thai developer Seacon Home Group will boost prefabrication production capacity by 30 percent.
The move also aims to tap the mass-market segment as low-cost houses account for 50 percent of its orders and these units significantly use prefab components. New prefab pieces made at its factories will include toilets and stairs.
“The home-construction business today is a lot different from 52 years ago. Most obvious is the higher number of construction companies for high-end homes than those for the masses. Now, the mass market is mainly the responsibility of small contractors. That is why we have had to develop our construction process to support current demand,” said Seacon Group Managing Director Kobchai Sosothikul.
Moreover, the entire housing industry is expected to shift to prefabricated construction, as the system is faster, cheaper and requires less manpower.
Shortage in skilled workers increases the time it takes to build a home by 20 to 30 percent from the usual completion time of six months for a low-cost home, eight to 12 months for a medium-priced unit and 12 to 16 months for a luxury home.
Given that, developers are required to pay their workers, these delays lead to higher cost and ultimately higher home prices. Specifically, higher wages pushed home prices by 15 to 20 percent after the 2011 flooding.
For mid- to high-end homes, Seacon will utilise more tools and machines as only 10 percent of the components for these homes are made from prefab components.
“The low-end segment does not care much whether the house is built with prefabrication pieces or not. They focus on function, strength and budget," noted Kobchai, adding that the group raised its home prices by an average of five percent this month.
On average, a low-cost Seacon home has a starting price of THB2.6 million or THB11,000 psm, while a high-end unit cost THB8 million or THB21,000 psm.
Nikki De Guzman, Junior Reporter at PropertyGuru, wrote this story. To contact her about this or other stories email nikki@allproperty.com.sg
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