Infrastructure Australia outlines growing role of prefabrication in national delivery strategies

Infrastructure Australia’s 2025 Infrastructure Market Capacity Report has outlined rising pressure on national delivery capacity and identified modern methods of construction as a key pathway to improve productivity and address housing constraints. The Property Council of Australia said the report reinforces the need for governments to align planning, procurement and training systems with the emerging requirements of a more industrialised construction sector. (main image: New modular home delivered by Moov Modular in Lake Macquarie as part of the NSW Government’s $6.6 billion Building Homes for NSW program, installed on-site in under four weeks using Modern Methods of Construction to support faster housing delivery.)

The report captures $242 billion in major public infrastructure planned between 2024–25 and 2028–29, a 14 per cent increase on last year’s outlook. Much of this growth is concentrated in housing, utilities and energy transmission, with state and territory governments expanding delivery programs in response to housing supply targets and the energy transition.

According to the report, modern methods of construction currently account for less than five per cent of the national market, but interest is growing as governments seek ways to reduce construction times and manage workforce shortages. The Queensland Modern Methods of Construction program is highlighted as one of the clearest examples of this shift, with more than 800 homes completed or underway using volumetric modular and offsite manufacturing processes. The program’s Bundaberg project, completed in seven months, is presented as evidence of faster sequencing and reduced on-site disruption achieved through standardised design and parallel manufacturing.

Industry response and implications for future delivery
In New South Wales, the report notes increased use of modern construction techniques across housing, education and community infrastructure. Pattern books, supply chain mapping and procurement reforms are being developed to encourage more consistent use of prefabricated and modular building systems, supported by updates to planning and regulatory settings.

The Property Council of Australia said Infrastructure Australia’s findings demonstrate the importance of policy certainty if the private sector is to scale manufacturing capability and invest in new delivery models. The Council noted that planning reform, incentives for digital design adoption and clearer pathways for product certification would help reduce risk for businesses adopting modern methods of construction.

International examples referenced in the report, including accelerated bridge construction programs in the United States, show how prefabricated elements can shorten construction windows and reduce network disruption. Infrastructure Australia suggests similar approaches could support Australian governments as they work to improve productivity across the public infrastructure pipeline.

The report notes that broader adoption of modern methods of construction will depend on better pipeline visibility, clearer procurement incentives and alignment between training programs and emerging industry needs.

Find the 2025 Infrastructure Market Capacity report HERE