A core promise in the MMC narrative is the built-in pledges of end-of-life recycling.
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Construction continues with its upward cost trajectory despite modern methods of construction (MMC). More projects become unfeasible. Market and social housing providers face these headwinds. The opportunities heralded by MMC have fallen short. Business as usual has not changed much. It’s tough going out there. Modernisation of the industry seems stalled.
The tensions of lower cost, faster, better quality buildings and lower whole of life carbon footprints weigh in every MMC narrative. Universal commitment and results remain elusive.
A social housing social housing development in Cairns is an exhibit that shows obvious fault lines.
Some 120 modules sent to landfill, after the failure of assembly contractors to secure the modules from rain and storms.
So much for the circular economy pledged for end of life.
The challenge is how to build in procurement integrity where alignment between all the parties is enshrined throughout the transaction and technical pathways.
Australia’s public and private sector procurement systems create misalignments
Embedded risk aversion plays out at every stage of MMC procurement. The integrity of buildings procured and delivered under these principles is often not predictable.
The $426 million modular project is experiencing the consequences of supply chain discontinuity, defects and remediation. Early insights claim key defects involving excessive water damage, black mould contamination, structural failures, material degradation, failed finishes, construction sequencing with potentially 120 modules being sent to landfill.
Unpacking this will take time.
Perhaps a regional councillor’s observation paints a more graphic picture of what is happening on site.
Queensland’s Housing Minister Sam O’Connor suggests these things happen on big projects. The cost of 120 discarded modules may be close to $52 million.
- Clarification 15 April 2026. The Queensland Department of Housing and Public Works is understood to have invested in the project along with a financier but the commission of the project and its delivery were separately handled.
That is a large bite out of Housing Australia’s $206.25 million in funding to support one of Queensland’s largest social and affordable housing projects which should deliver 490 dwellings in Cairns. It’s also a lot of landfill. The ghosts of projects like these, big and small will damage prefab momentum in Australia. Hopefully faultlines on this project will cause a rethink of future MMC procurement.
Where are the fault lines and how do they impede modernising our industry?
Both clients and industry need to look at the end-to-end systemic issues that are fragmenting a modern approach to construction. We need to eradicate faultlines. There are no silver bullets but understanding the end-to-end technical and transactional interfaces necessary to give a new way of building a better chance must be a start. Otherwise, the same faultlines will remain.
One of the pre-reads to at a University of New South Wales course I am helping to deliver is New York Tech’s discussion paper Handshake to Hardware. It explores important questions along with pathways to provide North American offsite construction with a uniform Law and Commerce framework. The course targets mid-career practitioners.
The paper is a timely read. It unpacks a system suited to the age of bespoke buildings and artisanal trades. It explains how business as usual has become a structural obstacle to innovation in an era of modular assemblies, offsite fabrication, and industrialised building processes. The paper makes the case that the AEC (architecture, engineering and construction) industry’s continued reliance on common law service contracts is preventing the emergence of a national Configure to Order marketplace for building component deliveries, which are the minimum production method for nearly every other manufacturing industry.
The authors discuss how a uniform commercial code might evolve to reflect a built environment increasingly produced through offsite manufacturing. They discuss how building components move through fabrication, assembly, transport and installation, and transverse multiple legal regimes – first governed as goods and finally as real property. These seem important considerations. Especially for asset owners and users well beyond the initial build.
This article focuses mainly on the use of MMC in the multi-unit apartment market.
Increasing the supply of social, affordable and market housing is confounding governments nationally. The use of MMC has been tendered as a partial solution. There remain many issues. Offsite construction is not new. There are remarkable examples of successful off-site in engineering infrastructure and mining. Complex components some weighing over 2000 tonnes have been successfully designed, manufactured, transported, installed and commissioned over long distances and from many markets, for many years. The logistics involving the technical and transaction interfaces between industry and government displayed on them are impressive.
Considerable industry advocacy and public policy have been invested in promoting MMC as an eventual way forward for multi-unit housing. Even in off-shore markets where MMC should now be showing signs of successful maturity, the evidence is not exciting. It seems a good time to ask why the possibilities of off-site, prefab and modular in Australia are not achieving wider market acceptance.
What are the root causes of the potential for faster, better, cheaper and more sustainable not being embraced? The reality is that the current pipeline of MMC projects has yet to provide convincing evidence of these prospects being achieved, or achievable.
That said, I remain a modern construction enthusiast.
Where too from here?
MMC has made little convincing progress in the mainstream Australian residential construction market. Rising construction costs and time delays continue to make new projects less feasible. Off-site construction appears to be normalising multi-unit residential construction costs north of $7000 a square metre. The challenges for market entry residential purchasers becomes harder. Betting on the current approaches to MMC turning this around seem unlikely.
Costs must come down.
David Chandler AM will take part in delivering a new course the Legal Essentials for Off Site Construction offered by UNSW next month that is intended to help solve some of the issues mentioned.