Federal government commits $39.3m to open-source prefab housing system trials

The federal government will allocate $39.3 million toward trialling a new open-source prefabricated housing system across Australia, with Housing Minister Clare O’Neil positioning the initiative as part of a broader attempt to improve housing productivity and accelerate residential construction delivery.

The funding, announced on May 28 by Housing Minister Clare O’Neil during a National Press Club address in Canberra, will support expansion of the Building 4.0 Cooperative Research Centre’s “kit of parts” housing platform known as System 600.

The announcement signals a notable shift in how prefabrication and industrialised construction are increasingly being discussed within government. Rather than focusing solely on volumetric modular housing or single factory-based delivery models, the System 600 approach centres on interoperable building components manufactured across a distributed supply chain.

System 600 shifts focus from modular factories to interoperable housing components
Developed jointly by Homes NSW and the Building 4.0 CRC, the system attempts to standardise housing components while maintaining architectural flexibility. Different manufacturers are able to produce compatible parts using common standards, allowing buildings to be assembled from repeatable systems without locking projects into proprietary platforms controlled by a single company.

The concept moves away from producing entire modular buildings inside one facility. Instead, buildings are broken down into repeatable subsystems covering structure, external envelope systems, services and interior finishes.

“We have standard parts, not standard designs,” Building 4.0 CRC Director Mathew Aitchison said in material outlining the system.

Researchers behind the project describe the system as applying manufacturing logic to construction by standardising underlying components rather than standardising entire buildings. The aim is to create repeatability and manufacturing scale while preserving housing diversity and site responsiveness.

Professor Daryl Patterson, who leads the project’s technical development, said the system was designed partly in response to the risks associated with highly centralised modular manufacturing models.

“We have a lot of capacity in the Australian industry,” Patterson said. “There’s a lot of intelligence in the supply chain.”

Under the federal proposal, states and territories will be able to undertake pilot projects, technical development work, training programs and supply chain expansion linked to the system.

“If we want housing to be more affordable, we need to find smarter ways to build more homes,” O’Neil said. “Today’s announcement is about backing new building methods that can speed up construction and lower costs.”

The funding announcement arrives amid mounting concern around housing productivity and supply. Recent Productivity Commission findings showed Australia is building roughly half as many homes per hour worked as it did in 1995, while residential construction timelines have almost doubled over the past decade. The System 600 initiative also reflects growing overlap between housing policy, manufacturing capability, digital coordination and industrialised construction systems.

Find an explanation of Building 4.0’s System 600 HERE