Why does everyone want to buy a shipping container home?
88,000. That’s the number of people who saw a recent container home album share on our Facebook page, resulting in the post being clicked on more than 24,000 times, receiving almost 520 comments and more than 360 shares. Much of this was organic traffic too, with a humble R100 thrown into a boost campaign!
This is in no way a fluke, either. The top-read story of all time on HomeTimes deals with buying a container home and the challenges regarding financing them; we have also marketed two container homes created by two different companies, with their popularity on our Facebook page and website being equally phenomenal.
Why is this? What makes container homes so appealing in a country where brick and mortar remains the most common and preferred building method?
Is it the cost of the finished product? A 200m², three-bedroom, double-storey container home – with full insulation and latent and patent defect five-year guarantees – will cost just R660,000!
The beauty of a container home is the fact that it is designed and fitted out in a factory before being delivered to site where it is completed. It can also be move-in ready within just a few short weeks – compared to around a year for conventionally built homes.
What this means is that regardless of where the home is delivered, the price remains the same. The only variable cost is the land.
South Africa’s most exclusive estate is Val de Vie – rated number 1 by New World Wealth two years running – where current prices for vacant land start from R1,94m for 730m².
In theory, therefore, your dream container home in your dream estate could end up costing you R2,6m; the flipside is that a similar-sized, brick and mortar home in Val de Vie, on a similar-sized stand, will cost you between R5m and R6m! That’s more than double the price of buying a stand and getting a custom-built container delivered to the estate.
This is a dream come true for many South African home buyers! The only problems are: estates have strict architectural and building guidelines – container homes are unlikely to pass their approval, regardless of their impeccable finishing and style – and bank financing is tough to come by.
Tshepo Machethe, director of Contabode – a premium container housing company – says that banks do not simply shut the door in applicants’ faces when finance for container homes is sought. The bank will consider its relationship with the applicant, past financial performance and what kind of equity you can bring to the table. But they are not falling over themselves to finance them, either.
What is key is the distinction that what you are asking the bank to finance is not a mobile home, but rather a structure fixed to the earth. This will ensure can be seen as a bankable asset.
But how well does it behave as an asset? Meaning, does it hold, at the very least, or increase its value over a period of time? The local container home industry is in its infancy, which means that no one really knows.
But in theory, why should a container home that is firmly fixed to an erf in an estate or off a suburban street not behave in a similar way to its brick and mortar counterparts? What the modern container home brings to an established, tree-lined suburb is a shot in the arm of fresh, young architectural blood. It’s really a pity, though, that banks remain sceptical in risking their cash on an unproven asset that carries the risk of…well…being carried away.
What, however, stops a bank from partnering with a GPS tracking company that can simply “plant” a tracking device in the home to ensure it is not moved elsewhere? The answer is nothing stops a bank from doing this. The consumer appeal is there, but banks do not share it…yet!
Home buyers considering investing in this housing type need not worry about a lack of demand from other buyers when it comes time to sell; this is clearly evident in the many hundreds of enquiries received on just one post, and on just one Facebook page.