Search Articles

Find tips, tools and how-to guides on every aspect of property

What is a prefab house and should you buy it?


Homebuyers will be soon be seeing more houses in Malaysia built using the Industrialised Building  System (IBS). Here’s what you need to know about prefabricated homes.

An apartment show unit at CIDB’s IBS Show Village which details precast concrete load-bearing walls and extensively used beams and columns. ©

The term that is becoming a hot topic in the construction industry in Malaysia, is prefabricated (prefab) homes. Essentially, a prefab house is constructed using prefabricated parts, where its construction entails the manufacturing of components off-site in a controlled environment, which are then transported to the construction site for installation. The assembly of these separate parts is done in a “Lego-like” manner.

The prefabrication method is actually a subset of the Industrialised Building System or more widely known as IBS in short. In countries like the United States of America, a whole house could be manufactured in a factory – seeing one being transported on the roads can be quite a sight to behold. These are also known as modular homes.

In Malaysia, the prefabrication is currently limited to individual components like wall and ceiling panels so IBS is a more accurate term. The Housing and Local Government Ministry (KPKT) is especially keen for developers to adopt IBS, especially in the affordable housing sector, in order to keep prices low. According to the Construction Industry Development Board (CIDB), the IBS adoption rate in private projects is currently at 35% while the target is to reach 50% by 2020.

Malaysian developers were initially reluctant to adopt this method because of the high initial cost of setting up facilities to manufacture these components. In the long run, using the IBS system will reduce the reliance on foreign labour, reduce wastage of construction materials and shorten the construction time.

As the benefits of using IBS became more apparent, more developers are starting to invest in this method. Gamuda has an IBS factory in Sepang while IJM has recently started constructing a facility in Bestari Jaya, Selangor.

What are the advantages of homes built using IBS?

A model of precast wall panels. ©

1. Construction time is reduced

As the components are prefabricated in a factory, construction is less dependent on weather conditions. This allows more time for putting the building together on-site and homes can be delivered to buyers faster. According to Gamuda, using prefabricated components can reduce construction time by 12 months!

Furthermore, it only requires one-third of the labour force as compared with the conventional method. With the use of IBS, LBS Bina Group Bhd completed 673 units of double-storey terrace houses in LBS Alam Perdana within 12 months, delivering the homes 6 months earlier than planned. This led to a saving of 33% on construction time.

MORE: Should I buy a house now or wait?

2. Reduced wastage

Within a controlled environment and with computer-aided technology, there is less wastage of resources like cement, steel and electricity, thus making prefab homes highly sustainable. For example, SP Setia recorded a 4% wastage of steel as compared to around 10% when using conventional methods; while concrete wastage was reduced to 1% from 5%.

3. Consistent quality and durable

Components of a house such as walls and ceilings are manufactured off-site, such as in this IBS facility by Gamuda. ©

Components made with moulds and machines tend to have a more consistent quality and better finishing, thus reducing defects. Quality checks can be made in the factory too, mitigating any building deficiencies that might occur under the conventional method. Components produced in high volumes can also lead to cost savings. Not to mention, prefabricated homes are usually built on steel frames, making them very durable. With proper maintenance, they can last for generations.

4. A solution to the housing shortage

The main grouse of Malaysian homebuyers is that there is a lack of affordable housing. Using the IBS system means that more homes can be built at a cheaper rate. The homes built in LBS Alam Perdana, as mentioned above reduced dependency on manual labour by 31%, thus resulting in a 49% reduction in total on-site labour costs.

As developers start to adopt this system, it will mean that they can now look at breaking even in the affordable home sector that sometimes comes with a negative margin. The Housing and Local Government Ministry has announced that IBS will be used in all government affordable housing projects by 2024.

READ: A beginner’s guide for strata property owners in Malaysia

What are the disadvantages of homes built using IBS?

© 123rf

1. Lack of highly-skilled workers

While there is a reduced reliance on foreign manual labour with the adoption of IBS, the manufacturing and installation work requires highly-skilled labour. If the components are not installed properly, it could lead to leakages. The good news is that the government recognises this and there are training programmes available through CIDB for installers, manufacturers and consultants. The Housing and Local Government Ministry also announced in May 2019 that it will set up an IBS Academy in Terengganu.

2. Less flexibility for renovation

There are some limitations to renovating a home built with prefabricated materials. Bearing in mind that renovation works for houses usually involves the rear and front portions, most developers will not use the precast concrete systems for these areas, thus allowing a bit of flexibility.

TIP: CIDB recommends contacting the developer or a consultant for advice before making renovations. Some developers will indicate where the IBS components are located in the house plans that are handed over to buyers.

3. Volume and cost-effectiveness

While using IBS has its advantages, it will only be cost-effective if there is a big volume as each prefabricated component is designed for a specific project. Hopefully, as more developers adopt the system, the increase in demand will bring costs down, eventually benefitting homebuyers.

Should I buy a prefab home?

For homebuyers, rest assured that any defects in the IBS components will be covered under the defect liability period. With IBS components detailed out in the layout plans, homeowners can still make renovations to their homes. Some developers are also looking into flexible layouts where non-load bearing walls can be removed to make a space bigger, for example, two rooms that can be merged to create a bigger room. If in doubt, you can always ask the developer before purchasing a home.

Components like toilet pods can also be manufactured off-site. ©

Some of the projects that have incorporated IBS are Gamuda’s Gamuda Cove in Selangor; and Sime Darby’s Aurora in Subang Jaya and Harmoni 1 in Shah Alam. SP Setia’s Setia City Mall also used IBS during construction.

With big players like Gamuda and IJM investing into the production facilities and eventually becoming suppliers, even smaller players will benefit. CIDB has also recommended the mandatory use of IBS in private sector projects by 2020.

The advantages of using IBS outweigh the disadvantages, especially in terms of cost, resources used, its short timeline and durability factor. So we are likely to see more and more projects in Malaysia adopting the use of the system, further providing more affordable options to homebuyers.

Edited by Reena Kaur Bhatt

Disclaimer: The information is provided for general information only. Malaysia Sdn Bhd makes no representations or warranties in relation to the information, including but not limited to any representation or warranty as to the fitness for any particular purpose of the information to the fullest extent permitted by law. While every effort has been made to ensure that the information provided in this article is accurate, reliable, and complete as of the time of writing, the information provided in this article should not be relied upon to make any financial, investment, real estate or legal decisions. Additionally, the information should not substitute advice from a trained professional who can take into account your personal facts and circumstances, and we accept no liability if you use the information to form decisions.

More Articles