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Interim report highlights prefabricated and modular construction as part of a broader push to improve housing productivity and accelerate housing supply.
The Productivity Commission’s interim Housing Supply Regulation report has attracted attention for its recommendations on planning reform, increased housing density and faster development approvals. Less noticed, however, is its recognition of prefabricated and modular construction as part of the broader solution to Australia’s housing shortage.
Rather than treating industrialised construction as a niche sector, the Commission has explicitly linked housing regulation with more productive methods of construction.
The inquiry’s terms of reference directed the Commission to examine approval processes, “including any barriers to the uptake of more productive methods of construction.”
Regulatory reform and construction productivity
Building on that brief, the report states that it examines “how the housing regulatory system can support more productive methods of construction such as prefabricated and modular housing.”
While the interim report does not recommend MMC-specific reforms, the inclusion is significant.
It places factory-built housing within the national policy discussion on improving construction productivity and increasing housing supply.
The Commission argues that regulation is one of the government’s most powerful tools for addressing Australia’s housing shortage, stating that “policy reform will make a difference over time” and identifying regulation as “one of the key levers for governments” to improve housing supply.
Among its proposed reforms are expanded fast-track approval pathways, greater use of pattern books, improved coordination between approval authorities, increased use of artificial intelligence in assessment processes and more transparent reporting of approval performance.
For the offsite construction sector, those proposals raise an important question. If governments are seeking faster, more predictable housing delivery, should planning and approval systems better recognise the characteristics of factory-built construction, including standardised designs, repeatable manufacturing processes and quality-controlled production?
The report does not answer that question directly, but it opens the door for the sector to do so.
With the Productivity Commission accepting submissions until 30 September 2026, Australia’s prefabricated and modular housing industry has an opportunity to help shape how future regulatory frameworks can better accommodate industrialised construction as part of the nation’s response to the housing shortage.
Find the Productivity Commission’s interim Housing Supply Regulation report HERE
