Victoria’s four-home fast track could create a new pipeline for modular housing

From October, qualifying developments of up to four homes on a residential lot will be able to have their planning applications assessed within 10 business days, extending the pathway previously available to two-home developments. (Main image: Prefabricated elements supplied by TBS for a Henley Properties development in Berwick.)

Projects must meet Victoria’s Townhouse and Low-Rise Code, including requirements covering setbacks, landscaping, privacy and design. Projects outside those requirements will continue through the normal planning process, while heritage controls, environmental overlays and other protections remain.

The reform is construction-method neutral, but expanding the pathway from two to four dwellings brings small townhouse developments more clearly into the potential market for modular housing.

The opportunity is repeatable systems
For modular manufacturers, the opportunity is not simply a faster permit.

Three- and four-home developments offer enough repetition for manufacturers to use common structural grids, module dimensions, wet areas, services and major components across several dwellings on the same site.

The larger opportunity is to carry that system from one development to the next.

Rather than designing a new modular solution for every block, manufacturers could develop a controlled family of two-, three- and four-home configurations around known planning parameters, varying orientation, façade treatment and site arrangement without materially changing the production system.

The commercial question is how much of the underlying product can remain unchanged.

If module dimensions, structure and services have to be redesigned for every site, the project remains largely bespoke. If those elements can be retained while the configuration changes, manufacturers begin to gain repetition across a pipeline rather than within a single project.

Real estate agents could start the conversation
That pipeline may begin well before a builder or manufacturer becomes involved.

Real estate agents are often among the first people discussing the redevelopment potential of suburban properties with owners and prospective purchasers. That could make them an important connection point between suitable sites and repeatable modular products.

A manufacturer targeting this market could define the basic site characteristics its system requires — frontage, depth, access, orientation and likely dwelling yield — and provide agents, developers and buyers with a clearer way of identifying blocks suited to two-, three- or four-home configurations.

The conversation could then begin when a property is being marketed or acquired, rather than after a bespoke townhouse design has already been commissioned.

For modular suppliers, that represents a different approach to market development: find sites that suit the housing system rather than continually redesigning the system to suit individual sites.

A sizeable infill market
The Victorian Government says applications for townhouse and low-rise developments have increased by almost 50 per cent since the Townhouse and Low-Rise Code was introduced. Permits for multi-dwelling developments in Melbourne’s middle suburbs have increased from around 2,000 to more than 3,100.

Those figures do not show how many projects would suit modular construction, but they point to a substantial existing market for small multi-dwelling development.

The opportunity created by Victoria’s reform may therefore extend beyond faster approvals. If manufacturers can combine repeatable housing systems with a repeatable way of identifying suitable sites, small townhouse development could begin to look less like a succession of one-off modular projects and more like a scalable housing market.

Find VicSmart permits HERE