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Prefab Homes Ontario: The Good, the Bad, and the Ugly

Prefab Homes Ontario

A prefab or modular home is a home that is partially built in a plant and then shipped to a construction site where it is set on a previously constructed foundation. While a typical one-story bungalow consists of two or three modules, larger custom homes might use five or more of varying dimensions.

Prefab Homes – Ontario

The prefab homes Ontario industry mentions many advantages of using modular home construction. Its literature often states that it is more cost-effective and time-efficient compared to conventional “stick-built” home construction.

However, all home building comes with some hurdles. While the use of modular prefab building techniques helps to overcome some of the difficulties associated with stick construction, the prefab process has some unique challenges.

prefab homes ontario

Prefab’s Claims to Fame

There are a variety of claims made by the prefab industry to support the idea that this method of home construction is the best way to present modern architecture to the masses. Not every prefab manufacturer makes every one of these claims, but they are so widespread, we will approach them as the claims of the industry as a whole.

  • Prefab homes cost less
  • Prefab homes take less time to build
  • Prefab homes create less waste
  • Prefab home is more “Green.”

So, let’s take a deeper look and compare the pros and cons of prefab home construction to stick-built:

Prefab Homes Cost Less

We are starting here since it is the easiest to expose, and is also the main reason that many people start looking into purchasing a prefab home.

When asking how much a modular home will cost to build, many different sources will give you many different answers. Some salespeople will tell you that they can build you a home for as low as $100 per square foot, but what they are quoting you is only the base price that is far from the total cost of the finished home.

The cost to build a house depends on a variety of components; home design and layout, the number of bedrooms, the number of floors, the size of the home, and the types of materials used in construction. It also depends on your lot and the contractors you use.

Prefab manufacturers, resellers, and salespeople will tell you that modular construction is lower because of the time and labor savings, but let’s ponder this subject a little deeper:

  • a.) Prefab manufacturers work in factories requiring staff above and beyond those building the homes. They also have costs that most residential builders don’t, such as large equipment costs, utility costs, and maintenance costs.
  • b.) Company Profit – studies show that manufacturers are making at least as much profit as the average residential builder, frequently much more. Most of the cost savings resulting from the prefab manufacturing process stay in the pockets of the manufacturer.
  • c.) Trucking and Crane Fees – These can easily run over $10K per house and can be notably more if the distance from the manufacturer to the construction site is considerable.

It is a given that building a home in the factory is cheaper than building it on site. You don’t have to fight with the weather, and modular construction can be more time-efficient.

Nonetheless, after you pay for the delivery, transport insurance, and a crane to place it, the costs for the average custom home are approximately the same. Most studies concluded that there is no price difference in the actual construction from start to finish.

Clip Art Graphic of a Yellow Residential House Cartoon Character

Prefab Homes Take Less Time to Build:

Building a custom home takes time. It includes planning, getting a permit, onsite prep work, foundation construction, framing, servicing, and finishing.

Prefab modular construction is faster than stick-built. It can take place at the same time as the on-site prep work or when the weather conditions are not suitable for outdoor work.

However, the owners have no control over the construction of the project once the construction begins. Their home is in a factory being moved down an assembly line. Therefore, owners must make up their mind on all aspects of the design before construction begins.

As a general rule, prefab homes are anywhere from 50% to 80% finished when delivered. The amount of remaining “finishing” work will take anywhere from four to eight weeks, depending on the layout, size, and complexity of the house.

As the building of custom homes takes on average from 6 to 8 months, the construction of a prefab home may shorten this period by 1-2 months.

Prefab Homes Create Less Waste:

Since modular is built in a factory setting, it is easy to see why they claim to produce less waste by setting aside their off-cuts and reusing it in other places or projects.

What they do not often tell you is that their modular structures use 20%-30% more raw materials than stick-built homes to withstand transportation.

Some will argue that on a stick-built construction site, one-third of the materials are wasted through theft, water damage, or just tossed into the garbage bin.

Prefab Homes Ontario


Prefab Home is More “Green:”

“Green” is hot now, so the modular home manufacturers are jumping in and claiming an advantage in the “green” department. Much of the green claims in prefab come from the lower waste claim.

The new one that we’ve heard more of lately is that the insulation is installed to better standards than site-built homes because of the superior labor and inspections put in place by the factories.

This seems like a weak claim for several reasons. Most prefab companies are still using loose, batt insulation that is often falling out of the framing by the time the modules reach the site. Batt insulation alone is not what is making the better green homes out there more energy efficient.

Also, in many cases, all of that house wrap that is supposed to be sealing up the home from the outside is tearing apart and falling off of the exterior by the time the modules reach their final resting spot.

Lastly, the extra framing we spoke about earlier is causing more thermal bridges in the building envelope.

In other words, a more structural framing that connects to hold the drywall inside and the exterior finishings outside, the weaker the total insulation of the home. Wood makes a very poor insulator.

Design Considerations:

There is one definite advantage to having a home ‘stick-built,’ and that is in versatility – the ability to make changes to the floor plan. Let’s face it; a modular home has a basic floor plan, and the only options available to you are cosmetic changes. Whereas a contractor or architect, for a site built project will happily charge you to make changes to their approved plan. It’ll cost you more, but you can get precisely what you want

When comparing the design restrictions of both techniques, it is clear that stick-built has fewer limits than prefab does.

The modular architecture is limited to short based spans and does not use concrete or heavy gauge steel beams which are required for making long unbraced floor spans.

There are very few design restrictions when it comes to stick-built custom homes. With materials such as steel and concrete, spanning large distances, carrying heavier loads, and incorporating large amounts of windows in an outside wall are all feasible. Stick-built construction is also not limited in height.

Secondly, the amount of available customization between modular and stick-built homes varies considerably. Modular home manufacturers do not usually offer a lot of customization. Your choice is usually restricted to 20 or so of their own previously drawn plans. If they do allow changes or upgrades, the customization options are limited to in-house samples.

Prefab construction is also limited in that it cannot be built on a slab-on-grade foundation because it requires a crawlspace for placing and connecting of heating equipment.

If your plans are not very intricate, you have no large window area and do not need large spans; modular construction is most often the better choice.

Clip Art Graphic of a Yellow Residential House Cartoon Character


Many financial institutions make a distinction between site-built houses and modular homes when it comes to eligibility for a mortgage.

Before buying a prefab house, you should consult with your bank to find out if it is willing to give you a loan.

Some lenders don’t want to give mortgages for prefab houses because they see them as a higher risk. Prefab houses have a reputation for not holding their value over time.

The difference is how money is allocated throughout the project. Stick-built construction spends money more gradually as subcontractors complete their tasks. Modular construction demands more finances upfront to pay for the speedy completion of the structure.

Modular construction is also unique in that the buyer must pay to have the modules shipped to the building site, and must rent a crane and an operator to place the modules on a prepared foundation.

When financing a construction project, most project owners get a construction loan from a bank.

Building a prefab home requires you to pay the manufacturer while the construction process is underway, with payment in full due before the house is completed. If you don’t have the cash on hand, you will have to take out a loan to cover the costs.

Prefab Homes Ontario - Delivery

Prefab Homes Ontario – Delivery


Due to transportation and sometimes manufacturing limitations, module size can be restricted, resulting in smaller room sizes.

Also, since prefab modules must be carried from the factory to the lot, there is always the possibility of damage while in transit. Moving the completed modular building sections take up a lot of space. Depending on how far the modules must travel, your transportation costs could also be relatively high.

Shipping costs can be high when building in remote locations and modular units are transported over long distances, as plants are typically stationed far away.

Use of Materials:

Because modular homes are factory-built, materials and lumber are often bought in quantities at reduced prices that are passed on to the client. Climate controlled factories also protect you from the replacement cost of materials from on-site theft or damages caused by bad weather

Some will argue that prefab homes are mass-produced by large companies in centralized factories. As these businesses do this for profit, they will not use the highest quality or expensive materials available.

Others will say that because modular home manufacturers store their materials inside the factory, in a controlled environment, it reduces the risk of mould, rust, and sun damage that can often lead to human respiratory problems. Dryer wood also makes for fewer drywall cracks and callbacks.

Other Challenges With Prefab Homes – Ontario

It can be challenging to find sub-trades to do on-site assembly of modular units. Some local tradespeople felt that the contracts for doing the on-site assembly of prefab units were too small to bid on, and they would instead bid on full construction projects.

Some local trades were apprehensive about doing the onsite assembly, due to a lack of familiarity with modular housing.

Responsibility for managing callbacks for modular units can be ambiguous. It can be challenging to arrange repairs once modular units are brought to remote locations. It can be debatable whether the manufacturer or the onsite contractor is accountable for performing callbacks and repairs.

Clip Art Graphic of a Yellow Residential House Cartoon Character


It is tough to single out either prefab or stick-built construction and pick one as better than the other.

It depends on what you are aspiring to achieve. There are not a whole lot of differences between the two. If speed is what matters most, prefab is the best way to go because it’s a bit faster. If the flexibility of design is the most essential aspect of the project, stick-built construction can offer more flexibility.

The quality of modular homes seems more consistent, but the same quality can be achieved by a skilled custom builder using stick-built construction methods.

What type of work will you need to perform that is not done by the manufacturer?

  1. Major considerations, such as excavating and constructing a foundation.
  2. Constructing garages or bump-outs will also need to be completed by the homeowners or their builders.
  3. Depending on the lot, it may also be required to drill a well and arrange for a septic system.
  4. Any “finish” work that is not completed by the manufacturer will need to be done by you.
  5. Examples of “finish work” are:
  6. Utility connections: Testing the electrical system and installing any remaining light fixtures. Completing the electrical service connection to the panel box in the basement as well as any water and sewer connections.
  7. HVAC System completion – Installing the central air unit,
    furnace, and make ductwork connections.
  8. Taping joints and sealing any drywall cracks that may have happened during transport.
  9. Interior clean up and paint touch up.
  10. Exterior concrete work –Arrange for the pouring of any concrete slabs, patios, sidewalks, curbs, or driveways.
  11. Construction of wood decks or porches

The industry as a whole has grown over the last twenty-five years. There are still some significant differences between wide-ranging products and manufacturers, but the improvement is undeniable.

You have to be careful when buying your new home. If you decide on a modular home, it is crucial to pick the better quality manufacturer. I would recommend this warning when looking at stick-built homes too. One builder is not necessarily as good as another.

Manufacturers in Ontario

Prefab home manufacturers all tend to resemble each other, but, even though they all make similar homes, every establishment is different. Some large manufacturers make thousands of homes a year and serve Canada-wide and small manufacturers that serve only regions or provinces.

Some modular manufacturers specialize in only custom homes, and some build only specific floor plans.

Some prefab home manufacturers focus on only one type of home, and some manufacturers will make you almost anything under the sun.

Like every business, some firms do a better job than others, so look over the following list of the most popular prefab home manufacturers in Ontario.

Before buying a prefab home, research the manufacturer you are considering to find out what types of materials they employ. Some materials, such as glues, caulking, foam insulation, carpeting, pressboard, and MDF, may also manifest health risks due to the off-gassing of formaldehyde.

Clip Art Graphic of a Yellow Residential House Cartoon Character

Is A Modular Home An Option For You?

If you are the sort of home buyer that is looking for the best deal and is up to date on the quality of many modular homes, you may be delighted with one.

If you are a buyer who wants something uniquely yours, something customized or something that will impress the neighborhood, a modular home may not be the right fit.

Although these days, prefab homes are regularly built using high-quality craftsmanship that is similar to traditionally made houses, they are often thought of as substandard, and identical to such manufactured housing as mobile homes. It is a delusion that continues to endure.

Because of it, the value of your prefab home in Ontario, may not be as high as it should be when the time to sell it comes. The potential buyer may feel like the house isn’t worth as much because it is modular construction.

What’s Not Included in Most Prefab Home Contracts in Ontario:

  1. The cost of the land,
  2. Soil test and reports required by the municipality,
  3. Tree cutting and lot clearing,
  4. Excavation (gravel, fill, topsoil, landscaping, culverts, ditches, and other site work),
  5. Sewage, septic system or well installations
  6. Surveyor,
  7. Engineering,
  8. All permits (building, plumbing, driveway, septic, etc.)
  9. Foundation,
  10. Steel beams and posts,
  11. Concrete and concrete work,
  12. Basement finish of insulation, drywall, flooring, electrical and plumbing,
  13. Appliances
  14. Central air, fireplaces wood stoves, etc.
  15. Central vacuum systems,
  16. Caulking on-site, including vanity counters etc.
  17. Plumbing connections
  18. Installation of main and completion of electrical panel
  19. Hydro Electrical connections for well or septic system
  20. Telephone and cable connections to public services
  21. Some exterior finishes (stone, brick, concrete),
  22. Porches, decks, dormers
  23. HST
  1. Have you seen the new steel frame modular home builder?
    Unique in that they are the only csa certified modular home builder that manufactures steel free homes in the factory at pricing below wood frame homes

    • You’ll be cursing every time you go to hang something on a stud.

      • Drill a small “pilot hole” before installing the screw.

      • That’s why you buy “monkey hooks”. Check them out at Home Depot.

    • Steel frame homes benefits include the ability to find a stud much easier than a wood stud using a stud finder. Dont use a nail, use a tek screw, avaialble in sizes from 1/2″ to 3 1/2″ for larger items you need to hang on the wall.
      The benefits are many, a good place to start at

  2. Be careful of hidden fees Tina.

  3. Great article and agree with most points except the “flexibility of the design”. There might be limitations by certain builders, but these wouldn’t be technical limitations but more of service/offering. I’ve worked with most major companies you have listed here and most offered a complete custom build. We designed our own 3000 sqft home, provided the floor plan to the builder, they made one very minor adjustment and created blueprints based on those.
    Also disagree about the module size restriction impacting the room sizes. Not really clear about the connection here. Yes, there is a module size limit for transport purposes which will impact the number of modules that have to be transported, and in turn will impact the cost of transport, but you can have very large rooms regardless. Our house is complex and is made up of 7 modules, and it has both small and quite large rooms. It is further complicated by the fact that it is a 2-story addition to an older 1-story building, which required additional on-site work to cut-into the existing structure to connect to the new structure with a complete overhaul of all existing services. The modular build aspect of this was never a limitation.

  4. Hi Tom,
    can you tell me which company built your house. We are considering a modular home company but was unsure about the quality and overall quality and constructions

  5. Hi Tom,

    I have done some research on modular homes as well and agree with you, very well said. Which manufacturer did you use, that can make a bog difference. Can you please advise. Thanks.

  6. Hi Sue,

    Which manufacturer have you considered so far? Would you like to consider same manufacturer as we are considering?

  7. Dear Mediator,

    Can you please see if you can get us some responses? Thanks for your kind help.

  8. Thanks for sharing amazing metal building site . Its provide actually good suggestion .So thanks for sharing.

  9. So, have we managed to scare everyone off?

  10. Nope.

    • Too bad, seemed like such a good option. I’m looking for a ‘green’ solution for a simple home.

  11. I appreciated it when you shared that it is important to choose wisely your prefabricated building manufacturer. In this way, you can ensure that you are getting something that is made from high-quality materials. I would like to think if a company needs to acquire a prefabricated building, it should consider getting it from a reliable supplier.

  12. If a pre-fab house is sent to the U.S.A from Ontario, is it cover under the free trade agreement so no duty or taxes are paid ?

  13. I didn’t know that thousands of prehab homes were made each year. My wife and I want to move into a smaller home. I’ll have to consider getting a contractor to draw up the specifications.

  14. Be very careful, we have a prefab and in the winter, every morning, I have to wipe the windows because they are full of water and ice. I have contacted the seller and they tell me to turn on the air changer/that it is too damp in the house. The thing is that the humidity in the house is about 30% and the norm is more like 40% to 50% otherwise it can affect your health. And the company that sells the air changers tells me not to use the air changer when it is colder then -20 which is most of the winter, because it is too cold for the machine and it will run in defrost mode all the time. What am I supposed to do with that. I am fed up!

    • What company did you buy from. The HRV is supposed to be on low 24 7 365 days a year stated by building code. Tell me what company and I may be able to tell you why windows are sweating so much.

  15. Keep in mined I know one modular home manufacturer who doesn’t even have a licensed electrician or plumber on staff. But there homes are CSA certified, so I will leave it upto readers to figure out the quality from that. Also base flooring is very cheap kitchens are an issue although they say they are quality kitchens. One company in Ontario the marriage floor joints are not properly levelled leaving a hump or hollow when you step on it. The door frame and Trump are usually mdf. Not te mention with cheap materials they are way more than conventional building. Light fixtures are very cheap at the base price not much better on upgrade. Also no inspection by any inspector like stick built on site. Buyer beware

  16. Is this site operated by those modular home companies posted above. I put a real comment in and it doesn’t appear????

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