Modular construction backed at government hearing on Victorian regional housing supply

As pressure mounts to address Victoria’s regional housing crisis, experts and policymakers are increasingly turning their attention to modern methods of construction (MMC) as a practical way to accelerate housing delivery, reduce costs, and diversify housing types across regional communities. (main pic: Modular housing under construction at ARKit for Haven Home Safe’s Horsham development. Credit: Ashley Han.)

At a recent public hearing convened by the Legislative Assembly Environment and Planning Committee, a range of witnesses detailed the structural barriers limiting housing growth in regional Victoria. Colleen Peterson, Head of State Planning at the Department of Transport and Planning, pointed to the dominance of detached dwellings in regional areas, describing them as both a constraint on supply and a driver of affordability pressures. “Ninety per cent of all dwellings in regional Victoria were detached separate dwellings,” Peterson said.

New planning provisions, including a townhouse and low-rise apartment code, are intended to create faster approval pathways for denser infill development. “We really hope to see that regional developers will be able to take advantage of those provisions… where the building of even just two and three units on a block… will create more affordable, more diverse housing,” she added.

Calls to industrialise housing delivery

Australian Housing and Urban Research Institute Managing Director Dr Michael Fotheringham told the Committee that construction methods also needed to evolve. “We are pretty outdated in the way that we build houses in this country. We are lagging behind most of the world in terms of offsite construction,” he said.

Fotheringham flagged that conventional market-led delivery of higher-density housing is often not feasible in regional settings. “Higher density apartment development is very challenging. The costs are very high… That is not something that is easy to overcome.”

Dean Rochfort, Acting CEO of the Victorian Planning Authority, acknowledged that MMC is a focus for the state government’s building reform agenda. “The increased availability of MMC may deliver a range of benefits… including rapid development of new homes, greater quality control… and a reduction in emissions during the construction process,” Rochfort said.

Horsham project demonstrates how modular methods can bridge regional delivery gaps

One recent project already applying these principles is in Horsham, where Haven Home Safe (HHS) has completed a 25-dwelling modular housing development using volumetric construction delivered by ARKit. Part of the $5.3 billion Big Housing Build and valued at $8.1 million, the project targeted regional workforce shortages and time constraints with a fully integrated offsite delivery model.

The selection of ARKit followed a competitive tender that included both traditional and modular builders. ARKit’s submission was approximately 8 per cent more cost-effective and included all site and civil works, further streamlining the process. “The key to wider developer acceptance of prefab… lies in the industry’s ability to genuinely address and solve real customer issues,” said Jack Haber, Head of Development at HHS.

For Horsham, where trades are in short supply and housing demand remains acute, the use of offsite construction removed key barriers to delivery. The modules were manufactured in Melbourne and trucked to site with minimal disruption and reduced need for skilled onsite labour.

Rather than being a one-off solution, the Horsham development offers a clear example of how modular construction can be used to address regional delivery challenges. By reducing reliance on local trades, controlling build timeframes, and lowering construction costs, the project demonstrates how MMC can support the delivery of housing in locations where traditional methods face consistent barriers. As further investment in offsite capacity builds across Victoria, the applicability of MMC to regional housing policy and procurement frameworks is likely to broaden.

Find the Victorian Government’s regional housing inquiry HERE