Prefab, But Make It Luxury: Modular Homes Can Be High End

Ty Sharp, a 26-year-old software consultant from Aspen, Colo., is building a 267sqm holiday home in Ventura, Calif. The four-bedroom, four-bathroom custom home, for which he’s paying approx. $2.34 million, will have an open-concept floor plan, a chef’s kitchen, engineered hardwood floors and a master bedroom with a private patio and soaking tub.

But if you visit the quarter-acre site, which has views of the Pacific Ocean, you’ll find only a foundation despite the fact that the home is slated for completion within two months. That is because Mr. Sharp’s new house, a prefabricated modular home, is being manufactured in a factory two hours away.

The term “prefab home” may conjure up images of a double-wide mobile home. But that is a misconception, experts say.

One of the modules of Ty Sharp’s home is fabricated in the Dvele factory in Loma Linda, Calif. The house will be built with a total of four modules, which will be assembled at the homesite in Ventura, Calif. PHOTO: DVELE

“A mobile home is a manufactured home, but built to a lower standard. Modular homes are also manufactured in a factory environment, so that confuses people,” said Kurt Goodjohn, co-founder and chief executive officer of Dvele, a San Diego-based luxury prefab-home manufacturer that is building Mr. Sharp’s home.

Joseph Tanney, a founder of Resolution 4 Architecture in New York City, who has been designing modular homes since 2002, said today’s modular homes can be very high end. A seven-bedroom, nine-bathroom modular home that Mr. Tanney designed in Bridgehampton, N.Y., and which was completed in 2018, has a pool, pool house, decking, geothermal- and solar-power systems and a green roof. It sold in Sept. 2020 for its full asking price: approx. $6.435 million.

The modules for modular homes are created in a factory, then delivered to the homesite via truck. There, they are placed on the foundation by a crane and assembled like Lego blocks. The foundation and site-preparation work takes place concurrently with the factory’s fabrication of the modular blocks. That speeds up the construction process, especially because some modular manufacturers ship the modules with all cabinets in place, appliances installed, lighting complete and toilets hanging off the walls.

“Houses still need to get finished when they arrive on-site, so even though we’re doing 50% to 80% of the work off-site, you still have to connect everything,” said Brian Abramson, co-founder and chief executive officer of Method Homes, a Seattle-based manufacturer of prefab homes. Mr. Abramson said that a high-end custom 4,000- to 6,000-square-foot, traditional stick-built home takes 16 to 18 months to complete, but a modular home of similar size would take less than a year. A typical 4,000-square-foot house would be composed of eight modules, Mr. Abramson said.

Demand for luxury modular homes, which was already strong, has increased due to the pandemic, developers say. Mr. Abramson, for example, who declined to provide specific sales data, said that Method’s sales for 2020 were up 50% from 2019 sales. He’s built a new factory to accommodate the increased demand.

An advantage of modular construction over traditional construction is that modular manufacturers control the entire fabrication process. Speed is another.

Mr. Sharp, who is purchasing the vacation home with his 28-year-old brother, Ian Sharp, said “It’s a lot quicker than the normal construction process because they can separate the building from the site work and do both at the same time.”

Mr. Sharp, who is a software consultant for home builders, said that his own experience in the industry has shown that while his home will take only about six months to complete, a comparable custom-built home would take 12 to 18 months.

By automating much of the fabrication process, Mr. Goodjohn said that modular construction is more insulated from labor challenges than stick-built construction.

“Modular is a manufacturing process, not a product per se,” said Mr. Goodjohn. “You can train people to do a specific role in the process without the need for skilled labor to make decisions on the fly.”

A module for a custom home in Jackson, Wyo., built by Method Homes is installed by a crane. The Grand Tetons are in the background. PHOTO: METHOD HOMES

Here is what to consider if you’re interested in purchasing a modular home:

Your site might not be suitable. Mr. Tanney, of Resolution 4 Architecture, says modules must comply with size and weight regulations for transport on highways and roads. This could affect the ability of the modules to reach your site.

You may not be able to make design changes once fabrication starts. All design decisions are made by a buyer before production, according to Mr. Abramson, of Method Homes. Once the factory starts to build your modules, you can’t make changes. That helps keep production on schedule.

Build in the cost of the build. Mr. Abramson said the cost of a module ranges from $250 to $350 a square foot, including all interior finishes such as cabinets, counters, appliances, tile, hardwood flooring and fixtures. That price doesn’t include siding, roofing, decks, on-site connections, HVAC, transportation of the modules and installation. These additional costs are about 60-120% of the modular cost, he said. You’ll also need to pay for the land, and the foundation and site work needed before construction.

Sydney is well and truly on the world map when it comes to luxury residential property, rivalling—and even beating—the likes of Tokyo and Dubai in terms of price per square metre.

The harbour capital has also proven itself to be a powerhouse for luxury residential rental growth. Knight Frank’s Prime Global Rental Index Q4 2024 showed prime rents across Sydney grew 4.7 per cent over 2024, the fifth-highest growth globally.

This has pushed several of Sydney’s top suburbs over the $2,000 per week median rent mark for a house, with surrounding areas fast approaching the milestone.

We’ve wrapped up the most expensive suburbs to live in across Sydney, with data sourced from property data analytics firm CoreLogic.

1. Vaucluse: Median purchase: $8.69m; Median rent: $2,198

Vaucluse has consistently ranked as Sydney’s most expensive suburb for rental properties over the past few years, even with annual rents contracting by over 14 per cent. What sets it apart is its unique geography—it’s the only suburb in the Eastern Suburbs that stretches from the harbour to the ocean. Homes in Vaucluse top the price charts because most either boast Sydney Harbour views or enjoy uninterrupted outlooks over the Pacific Ocean.

The Neighbourhood

While most Eastern Suburbs have one main beach, Vaucluse is dotted with several secluded spots, such as Parsley Bay, Milk Beach, and the recently reopened Shark Beach, which had been closed for several years due to retaining wall repairs.

2. Dover Heights: Median purchase: $6.38m; Median rent: $2,024

Vaucluse’s immediate southern neighbour, Dover Heights, is the only other suburb in Sydney with a median house rental over $2,000. Dover Heights hugs the cliffs and is well known as one of the most tightly held house markets in the Eastern Suburbs. The homes are perched on the cliffside, and the majority of houses in the area have at least four bedrooms, pushing up prices.

The Neighbourhood

While there are no beaches to speak of, its elevated position provides some of the highest views of Sydney Harbour. It is also home to the Federation Cliff Walk, a five-kilometre clifftop walk with postcard views of the Pacific Ocean from Dover Heights to Watsons Bay.

3. Bronte: Median purchase: $5.64m, Median rent: $1,963

Bronte takes out the title of the most expensive of the ‘typical’ Eastern Suburbs beachside suburbs. Just 30 per cent of homes in Bronte are separate houses, with nearly half being apartments. Houses in the rental pool are typically original homes dating back to the 1960s that have been renovated over the last decade or so.

The Neighbourhood
Bronte has long been a favourite due to its more relaxed beachside lifestyle compared to the busier Bondi, although Bronte is no longer a ‘hidden gem’ anymore. It offers numerous lifestyle perks, from a small high street lined with shops and cafés to several eateries located by the beach, which also features one of the best natural ocean pools in the Eastern Suburbs.

4. North Bondi: Median purchase: $4.81m; Median rent: $1,932

North Bondi has become a hotbed of new homes, with frequent sales of either original houses or older apartment complexes being bought to be demolished and replaced by brand-new contemporary builds. There’s a mix of original cottages and new homes in the rental pool, the latter fetching over $7,000 a week.

The Neighbourhood
North Bondi is situated in a small pocket, just south of Dover Heights and north of Bondi Beach. Starting at the Ben Buckler Peninsula, near where Campbell Parade transitions into Military Road, North Bondi is one of the most secluded areas on the coastline, with Hastings Parade, Brighton Boulevard, and Ramsgate Avenue all offering a southward view over the sand.

5. Balgowlah Heights: Median purchase: $4.13m; Median rent: $1,930

Balgowlah Heights is the most expensive suburb to rent a house in the Northern Beaches. Land sizes tend to be much larger, and you get more for your money in the area compared to the East.

The Neighbourhood
Balgowlah Heights is the harbourside southern neighbour of Balgowlah. The Sydney Harbour National Park occupies half of the leafy suburb, part of the Manly to Spit Bridge Walk, and is home to Tania Park, with a children’s playground and sporting facilities overlooking Manly Cove. Nestled on the northern shores of Sydney Harbour, it offers a serene and leafy environment.

6. Bellevue Hill: Median purchase: $10.63m; Median rent: $1,917

Bellevue Hill stands as one of Sydney’s most prestigious suburbs and has some of the largest houses by median land size.

Given the large gap between median purchase price and median rental price, it is no wonder renters want to live among $10m homes and pay under $2,000 a week, when a $10m purchase means $2m deposit, over $500k in stamp duty, and roughly $12,000 a week in repayments.

Most mansions will never make it to public rental sites and are often snapped up by Hollywood stars, musicians, or even royalty when they visit Australia.

The Neighbourhood
One of the biggest drawcards for those living in Bellevue Hill is the proximity to two of the country’s top schools. While there are no catchment areas for private schools, Cranbrook School and Scots College will always draw affluent families to the suburb. Scots fees start at around $30,000 per annum from Year One and reach nearly $50,000 by Year 12.

Sydney’s Cheapest Suburb: Tregear; Median purchase: $782,000; Median rent: $544

The cheapest suburb to rent in Sydney is Tregear, located on the outskirts of Mt Druitt, approximately 50 km west of the CBD. The median house rental is $544, which is four times cheaper than renting a house in Vaucluse. The median house price in Tregear is $782,000, around 12 times less than Vaucluse.

Sydney’s Best Suburb: Point Piper

If money were no object, it’s hard to look past Sydney’s most affluent suburb as the top pick for the best place to live in the city, in my opinion.

It doesn’t even have an actual median house price, simply because so few properties change hands. Last year, just five houses sold, ranging from $8 million to $51.5 million. Homes on the best streets offer gun-barrel views of the Harbour Bridge and the Opera House, while the cosmopolitan Double Bay next door provides all the lifestyle conveniences.