Japan as a highly industrialized developed country has not been able to solve flat construction in mass production yet. This demand has been existing for several decades, that is why different variants of industrialized flat construction ideas has generated interest. One of these attempts started from the Budapest University of Technology and Economics, Faculty of Architecture as an experiment leading to a specific construction technology. Experiments with prefabricated non-silicate-based assembled metal frames – like elements of car chassis – were carried out. They can be organized into modular buildings that can be quickly assembled on site. A new idea about houses with vertical transparent walls, called water houses, was developed by Gutai Matyas, graduate of the Budapest University of Technology and Economics, where the some-centimeter wide gaps between the boundary surfaces are filled with water. The first test water house has been built and completed in Kecskemet. This unusual system of building construction raises a lot of questions in the field of building physics. They include, among others, heat transmission of glazing as well as thickness and strength of glass plates. The paper elaborates the building physics and technology behind the water house.