Is Modular Building Cheaper Than Conventional Construction?

20 August, 2025
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Rising material costs, labour shortages and tighter project deadlines have made developers and organisations question traditional construction methods. One alternative gaining traction is modular building. But is it genuinely more cost-effective? 

What Is the Lifespan of a Modular Building Compared to Conventional Construction?

When comparing costs, longevity plays a key role. So, what is the lifespan of a modular building versus a traditional one? On average, modular buildings are designed to last between 30 and 60 years, though some can go well beyond this with the right maintenance. In contrast, conventional buildings often last anywhere from 50 to 100 years, depending on materials and build quality.

That said, improvements in modular technology have significantly narrowed this gap. Modern modular construction uses high-quality materials and structural designs that meet the same regulations as traditional methods, helping to extend building lifespans.

How Long Does a Modular Building Last in Real-World Use?

In practice, how long a modular building lasts comes down to usage and maintenance. Data from the Modular and Portable Building Association (MPBA) shows that many modular buildings, especially those in healthcare and education, remain in use for over 40 years. Even temporary structures have often exceeded their expected lifespan.

Permanent modular buildings, built for longevity, are designed to perform just as well as conventional constructions. With ongoing maintenance, many remain operational for decades.

Factors That Influence Lifespan

A few key factors determine the lifespan of a modular building –

  • Material Selection – The use of robust materials like steel frames and insulated panels can extend durability.
  • Environmental Conditions – Weather exposure influences how long a modular building lasts, especially in harsher climates.
  • Building Usage – High-traffic environments, such as hospitals, may experience more wear and tear.
  • Maintenance Practices – Regular upkeep is essential for maximising lifespan, whether modular or conventional.

How Much Does It Cost to Build a Modular Building?

Costs can vary depending on the industry, but modular construction is typically 10% to 20% cheaper than traditional methods, according to the Building Research Establishment (BRE).

Upfront Costs vs Long-Term Savings

While the upfront cost of modular construction is often lower thanks to factory efficiencies, the long-term savings are just as valuable. Modular buildings tend to have better energy efficiency and produce less waste from suppliers and construction alike, lowering ongoing operating expenses. So when weighing up how much it costs to build a modular building, it’s worth considering the savings over the entire lifecycle.

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Cost Breakdown – Design, Materials, Assembly, and Transport

The total cost of a modular build is made up of several parts –

  • Design – Simplified and repeatable designs can cut architectural fees by up to 30%.
  • Materials – Purchasing at scale for factory production helps keep material costs competitive.
  • Assembly – On-site assembly is faster and less labour-intensive, saving on workforce costs.
  • Transport – While moving pre-fabricated units to site adds expense, this is usually offset by the speed of installation.

A McKinsey report suggests that modular methods can reduce construction costs by 20% and deliver projects up to 50% faster, offering a clear financial advantage.

Is Modular Building Cheaper Than Conventional Construction?

In many cases, yes. The savings come not only from reduced construction costs but also from shorter project timelines and earlier building use.

Time Savings and Reduced Labour Costs

One of the biggest advantages of modular construction is speed. A modular healthcare facility, for example, can be completed 30% to 50% quicker than using traditional methods. This efficiency reduces labour costs and minimises the risk of delays or budget overruns.

Financial Benefits of Faster Project Completion

Quicker completion means earlier returns on investment. Whether in healthcare, education, or commercial sectors, being able to use a building sooner often results in significant financial gains. This is a crucial factor when assessing if modular building is cheaper than conventional construction in the long run.

By considering how much it costs to build a modular building, what is the lifespan of a modular building, and how long a modular building lasts with proper care, it’s clear that modular construction can be both a cost-effective and time-efficient alternative to traditional building methods.

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