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Last Friday, 22 November, in Canberra, the federal government reinforced its commitment to prefabricated and modular housing during a press conference addressing key economic and social priorities. Alongside discussions on energy transformation, inflation, and social media reform, prefabricated and modular housing emerged as a cornerstone of the government’s strategy to tackle Australia’s housing shortage. Treasurer Jim Chalmers and Industry and Science Minister Ed Husic detailed their vision for integrating innovative construction techniques with economic growth and sustainability. (main pic: SPACECUBE’s two bedroom modular Rapid Deployment Accommodation built in two days.)
Prefabrication as a Scalable Solution
Minister Ed Husic highlighted the untapped potential of prefabricated and modular housing. “Prefab and modular techniques currently make up about five per cent of residential builds,” he stated. “With the right regulatory and financial frameworks, this could rise to 15 per cent, creating tens of thousands of quality homes for Australians.”
Husic introduced key initiatives, including a new ABCB Prefabicated, modular and offsite construction handbook (developed in collaboration with Building 4.0 CRC) and a national voluntary certification system. These measures aim to simplify the regulatory landscape for modular construction. “Traditional building codes cater to onsite construction, but modular homes—built in factories and assembled on location—require an entirely different approach to approvals,” he explained.
Financial Collaboration to Unlock Modular Growth
Treasurer Jim Chalmers underscored the importance of attracting private investment to scale modular construction. “These discussions are about more than strong returns for investors,” he said. “They’re about unlocking opportunities in housing and energy that align with Australia’s economic priorities.”
Financing remains a key challenge for modular housing projects. Husic addressed this, stating, “This is a new and emerging segment with prefab and modular. With conventional construction, you know the timeframes, you know at which points you can release capital, and the risk profiles are well known. The good thing I can say in talking with banks in this arena, particularly through the ABA, is they’re of the view that we can overcome a lot of these hurdles and work together on it, and it’ll be really good to unlock credit for this as an emerging segment of the construction and build sector.”
A meeting with the Australian Banking Association this week is expected to outline solutions for addressing these financing barriers.
Economic and Environmental Benefits
Both ministers stressed the broader advantages of prefabricated and modular construction. Chalmers pointed to recent findings from the Productivity Commission, which showed that prefabrication could reduce construction costs by up to 20 per cent and halve project timelines. “These efficiencies could contribute an additional $5.7 billion annually to the economy,” he said.
Both ministers stressed the broader advantages of prefabricated and modular construction. Chalmers pointed to recent findings from the Productivity Commission, which showed that prefabrication could reduce construction costs by up to 20 per cent and halve project timelines. “These efficiencies could contribute an additional $5.7 billion annually to the economy,” he said.
Husic emphasised the environmental gains, including reduced waste and energy usage. “Prefab offers a faster, more sustainable way to build homes, especially in regional areas where traditional construction faces logistical challenges,” he said.
Aligning National Priorities with Modern Methods
The government’s modular housing initiatives reflect a shift towards addressing housing affordability and sustainability as national priorities. Chalmers addressed criticism surrounding the Future Fund’s evolving investment mandate, framing it as a necessary step forward. “The Future Fund and other national investments are being aligned with pressing priorities like housing and clean energy,” he said. “Our aim is to ensure Australia is prepared for the future, not stuck in frameworks designed decades ago.”
Husic framed modular housing as a dual opportunity for housing and manufacturing. “This isn’t just about homes—it’s about creating jobs and improving productivity in the construction sector,” he said.
Building Momentum for Change
Both ministers reaffirmed their commitment to modular housing as a practical and scalable solution to Australia’s housing crisis. “Prefab isn’t just an idea—it’s an actionable, transformative path forward,” Husic said. “We’re actively creating the conditions for this industry to thrive.”
Chalmers echoed this sentiment, emphasising the importance of collaboration. “The discussions we’ve had with investors, builders, and financial institutions today are part of a larger vision to transform the housing market,” he said. “We’re committed to building a future where housing is efficient, affordable, and sustainable.”
