The housing shortage in the Netherlands is increasing, while construction costs rise, skilled labor is scarce, and sustainability regulations are becoming stricter. In this context, modular construction is increasingly cited as a solution. But what about the costs? Is modular construction truly cheaper than traditional methods? In this article, we lay out the facts and figures—with a critical look at both the initial investment and total lifecycle costs.
Modular building: not only cheaper, but also smarter
Modular building is known as an innovative and efficient building method in which complete building parts—known as modules—are produced in a factory and assembled on-site in a short time. This process offers immediate benefits that are also financially noticeable.
According to various sources, including the Economic Institute for Construction (EIB) and Platform CB’23, modular construction can be 10 to 20% cheaper than traditional building methods, depending on the type, scale, and complexity of the project. These cost savings come from several factors:
Shorter construction time: lower labor costs and faster delivery
Fewer failure costs: thanks to standardization and controlled production
Lower financing costs: due to shorter project durations
More efficient material use: less waste = lower expenses
Sustainable and circular = lower long-term costs
One often overlooked aspect of cost comparison is the Total Cost of Ownership (TCO): what does a building cost over its entire lifespan? Here, modular construction truly shines.
Reusability of materials
Up to 90% of materials from modular buildings can be reused after disassembly. This significantly reduces demolition and raw material costs. Unlike traditional construction—where demolition waste often ends up in landfills—modular construction fits perfectly within the future-oriented circular economy.
Lower maintenance costs
Thanks to factory precision and standardization, modular buildings are of high quality. This means less maintenance, fewer defects, and fewer unexpected costs. Replacing or upgrading components is also easier, with no need for major renovations.
Flexibility = fewer financial risks
Modular buildings are designed to adapt over time. Units can be modified, expanded, or even relocated. As a result, investments are more versatile, allowing developers or municipalities to respond quickly to changing housing needs or policy shifts.
Examples of use cases:
Temporary housing that can be relocated later
Flexible healthcare or educational buildings that grow with the users
Office units that can easily be expanded during growth
This adaptability makes modular construction financially more attractive than fixed, traditional structures.
Speed as a cost-saving factor
What exactly does modular building cost?
The costs naturally depend on the type of project. On average, you can expect the following:
| Type of propery | Traditional construction | Modular building |
|---|---|---|
| Single-family home | € 1.800 – € 2.400 p/m² | € 1.500 – € 2.000 p/m² |
| Apartment complex | € 2.000 – € 2.600 p/m² | € 1.600 – € 2.100 p/m² |
Source: CBS, BNA Benchmark, and Bouwkostenkompas – indicative prices for 2024-2025.
Please note: For larger projects (50+ units), cost savings in modular construction increase further due to economies of scale.
