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Offsite construction to benefit from CBA’s new standardised lending contracts.
The Commonwealth Bank of Australia (CBA) has taken a major step in recognising the role of offsite construction, becoming the first bank to join prefabAUS and introducing new lending policies to support the sector. Announced today at Modscape’s Essendon Fields factory in Victoria, the move is expected to simplify financing for prefabricated homes and address key barriers to growth. (main image L-R: Grant Cairns, Executive General Manager of Business Lending at CBA; Michael Baumann, Executive General Manager of Home Buying at CBA; Damien Crough, co-founder and executive director of prefabAUS; Jan Gyrn, CEO and co-founder of Modscape.)
A Shift in Financial Backing for Modular Housing
Financing modular construction has long been a dilemma for the industry. This announcement signals a major shift in how prefabricated housing is funded, with CBA establishing a clear lending framework for modular homes. Jan Gyrn, CEO and co-founder of Modscape, highlighted the significance of the bank’s long-term involvement in the industry.
“Modscape has been operating for 18 years, and for the past eight years, the CBA has been our business banking partner,” Gyrn said. “This move is about recognising the need for alternative housing solutions and ensuring they have financial backing.”
He also pointed to the advantages of modular construction. “We are one-of-a-kind in Australia and the largest facility in the Southern Hemisphere. The ability to construct high-quality homes in a controlled environment ensures greater efficiency and consistency,” he added.
Traditionally, finance for prefabricated homes has been limited due to rigid lending policies designed for onsite construction. Under the new approach, CBA will provide progress payments of up to 60% of the total contract price before the home is installed on-site. If a customer uses an accredited prefab manufacturer, this increases to 80%.
Michael Baumann, CBA’s Executive General Manager of Home Buying, said the change is aimed at improving housing access. “Housing affordability is a big issue in Australia right now,” Baumann said. “We hope that together with the contracts we are building with prefabAUS, this will really unlock the potential of prefabricated construction.”
Baumann also explained the significance of the bank’s policy shift. “Right now, we only pay out funds as the building is constructed onsite. That obviously doesn’t work for modular homes, where most of the work happens offsite. These changes will enable more Australians to access prefabricated housing.”
He further emphasised the urgency of housing supply. “The government has set a target of 1.2 million homes in five years, and we know we’re behind that target. This kind of support for prefabrication is one of the ways we can close that gap.”
Watch the announcement
prefabAUS Partnership to Drive Industry Growth
The announcement follows commitments made at the Treasurer’s Investor Roundtable to improve financing pathways for modern construction methods. CBA’s new policy is expected to set a precedent for other financial institutions to follow.
Damien Crough, co-founder and executive director of prefabAUS, said the partnership with CBA is a breakthrough for the sector. “With support from CBA, prefabAUS will tackle some of the challenges facing our members and their clients,” Crough said. “We are excited to unlock the potential of offsite construction to address one of the nation’s most critical challenges—providing access to high-quality housing at pace.”
Crough also welcomed CBA’s direct involvement with prefabAUS. “We’re thrilled to have the CBA on board, as this kind of collaboration is crucial to overcoming financial barriers that have traditionally held the sector back.”
CBA’s involvement extends beyond finance. The bank has committed to supporting the development of a standardised contract for prefabricated housing, which would create consistency in transactions and further streamline the home-buying process.
Modscape’s Facility Showcases Future of Construction
The announcement was made at Modscape’s advanced prefabrication facility, the largest of its kind in the Southern Hemisphere. The factory plays a crucial role in large-scale residential projects, including the Affordable Housing Project in Cairns, which involves delivering over 1,000 volumetric timber modules.
Grant Cairns, Executive General Manager of Business Lending at CBA, said prefabrication has the potential to reshape housing supply. “We know that this is a fast, efficient form of building housing,” Cairns said. “It’s part of the solution to enabling more housing supply. We see a real opportunity for that in Australia.”
Cairns also noted the bank’s broader commitment to modernising the sector. “We’ve been supporting Modscape for eight years, particularly in their investment in robotics and automation. These innovations are key to making offsite construction more viable at scale,” he said.
He further underscored the global potential of prefabrication. “In places like Sweden, offsite construction represents up to 80% of new housing. There’s no reason Australia can’t follow a similar trajectory, and we’re excited to be working with prefabAUS to enable that.”
