Modular, prefab and design for manufacture and assembly aka Modern Methods of Construction (MMC) have remained somewhat on the margins in the Australian property industry. However, over a decade of concerted advocacy by organisations including PrefabAUS appears to be paying off, with finance, planning, building regulators and government all finally getting onboard.
Founding director and executive chair of PrefabAUS, Damien Crough, has been promoting the benefits of offsite construction in all its forms, including prefabrication, modular construction and design for manufacturing and assembly (DfMA) since 2013, when he worked for Hickory, one of the early innovators in Australia.
It’s been an ongoing process of addressing challenges including finance, regulations, stakeholder perceptions, technology, supply chains and standards, but the sector appears now to have entirely arrived in the mainstream.
Getting finance onboard
Crough is part of a working group with federal Treasury that is looking at ways to unlock barriers around financing for MMC projects. Participants include the big four banks, Bendigo Bank, legal experts and property sector heavyweights.
The goal is to arrive at contract models and agreed financing protocols that will enable manufacturers of MMC buildings to receive regular progress payments, rather than relying on a line of credit or bank guarantees against projects.
This needs to happen quickly, because there is so much demand for housing and capacity for the sector to scale up and start delivering.
Another challenge has been standards
The Australian Building Codes Board has been tasked with developing a voluntary certification scheme, with $4.7 million allocated by the federal government to support this work.
An initial piece of this work by the ABCB, a handbook on MMC developed in partnership with Building 4.0 CRC, was released in December 2024.
Crough says a certification scheme will recognise that “prefab is different to building on site”, so it could mean there are different compliance pathways.
There are already schemes overseas that do this.
Many of the individual products or components will already carry certification such as CodeMark or WaterMark that attest to a product meeting a specific standard of quality.
“Therefore, there is no need to undertake the standard types of inspections that would happen to something that is built on site,” Crough says.
He cites an example in New Zealand where “multiproof” certification on a building design, system or product reduces the inspection task onsite to checking location on the site and connections to drainage.
The HIA backs the certification scheme
Housing Industry Association chief executive industry and policy, Simon Croft said the recent federal budget commitment of $54 million to boost Australia’s capacity in prefabricated and modular housing was a positive investment in modern construction methods.
“It can support greater innovation across the sector and provide greater certainty and consistency for compliance and certification.”
HIA released a report in 2019 that called for greater national coordination to grow the offsite construction sector.
“The development of a national certification scheme specifically is something that was a primary recommendation from our report to remove roadblocks to streamline approvals and provide regulatory certainty to support innovation in the sector.”
More support for planning reform and innovative methods
Planning is another area where the dial is shifting and $120 million has been allocated by the federal government for states and territories to streamline planning around MMC.
“So, there’s a lot of levers being pulled, which will help the growth of prefab,” Crough says.
Other initiatives include the new $270 million Additive Manufacturing CRC. Construction is one of the sectors the research will target, particularly for potential applications for 3D printing and digital twins.
Digital twins for the win
Digitisation is another area of progress in MMC and ost of Crough’s members design and engineer their buildings digitally.
He says 3D modelling and digital twins are key to accurate pricing, procurement and manufacturing and production. There is also a “lot of data and information” being embedded into the digital twins, which means projects can provide an opportunity understand and improve building performance.
Data is also the only way to assess outcomes around waste, productivity and speed.
Value chain collaboration
Collaboration is also starting to grow, between architects, manufacturers and the supply chain. That means beautiful buildings, and innovation in the areas of materials, circular economy and waste reduction.
Suppliers such as CSR and Weathertex are working with the MMC industry to determine how they can better support them with their products and product sizes and sheet sizes, Crough says.
“There’s real collaborations happening between industry and the supply chain.”
Kits of parts
In addition to volumetric or whole building manufacturing, there has been a major growth in panellised, kit of parts and hybrid construction.
Crough says the ability to break the building down into panels or kits, kits of parts and components will be a big, growing sector of the industry.
“And there’s a pretty good supply chain in Australia now with companies producing those panel components and floor components and roof components.”
Manufacturing innovation in the Top End
Another government-backed research collaboration which is fostering growth in the sector is the Advanced Manufacturing Growth Centre, established by the federal government in 2015 and now delivering some of the action items of the Future Made in Australia agenda.
Indigenous prefab construction business, Warle Constructions, is part of an AMGC partnership with the Northern Territory government’s Northern Territory Advanced Manufacturing Ecosystem Fund (AMEF).
A $392,470 co-investment from the AMEF will help Warle establish an advanced manufacturing facility for an innovative light gauge steel “Howick Framing System” for prefabricated housing system that is inspired by IKEA kits. The company will also be establishing a training centre to upskill local people.
Warle Construction commercial manager, Tilman Lowe, tells The Fifth Estate that prefab and modular construction offer “practical solutions to many of the longstanding challenges in the NT, including geographical isolation, limited local skills and high transportation costs.
“By fabricating components in a controlled environment, we can ensure quality, reduce waste, and minimise delays due to weather, cultural considerations or logistical issues. It also means faster onsite assembly, reducing disruption and costs for communities,” he says.
“Importantly, prefab enables scalable housing and infrastructure solutions that are culturally appropriate, energy-efficient, and better aligned with the needs of remote communities.”
The collaboration with the AMGC has been a significant milestone in building capacity and innovation within the business, Lowe says.
“It’s a promising partnership that supports both technological advancement and meaningful community outcomes.”
Customers are keen
The project is currently in the process of design, materials testing and community consultation.
“We’re on track with our timelines and expect to move into construction and delivery in the coming months,” Lowe says.
There is already strong interest from potential clients, including government agencies, Aboriginal organisations, and community service providers who are looking for sustainable, culturally aligned solutions in housing, health, and education infrastructure.
“There is growing recognition of the value that Aboriginal-led approaches bring, not just in terms of outcomes, but in process and engagement as well. There’s also an increased curiosity from private sector partners who are eager to collaborate on innovative, socially responsible projects in regional and remote Australia.”
Bringing in the robots
Robotics is another area where MMC innovation is scaling up and Modscape is one of the early movers in this space. The company has established two “Modbotics” manufacturing lines, one in Queensland, one in Victoria. Chief executive Jan Gyrn says initiative was fully self-funded.
“While the robotic hardware was developed in collaboration with Randek in Sweden, all R&D to adapt, customise and fully integrate the system into our modular construction process was undertaken by our internal team,” he says.
The project started in 2019 and was driven by “a vision to create a manufacturing system purpose-built for high-performance volumetric construction.”
The combination of advanced robotics and in-house construction expertise results in “faster, smarter and more sustainable builds.”
Humans get the high-value gigs
Around 10 per cent of the construction process still requires onsite or manual trade work, primarily for service connections and final installations. The company’s human team also operate, monitor and maintain the robotic production lines.
“Modbotics power the process, but it’s our people who drive it, combining technology with craftsmanship to ensure precision, quality and performance at every step.”
Victoria and Queensland epicentres of demand
Demand for the company’s volumetric and panellised products includes government bodies, social and affordable housing providers, health and education sectors, as well as residential and commercial developers. Victoria and Queensland are particularly active markets.
Certifiers and councils are becoming increasingly familiar prefabricated construction, and many appreciate the reduced site disruption and fast-tracked timelines with
“We’re seeing particular interest from clients seeking to build at scale, where speed, repeatability and environmental performance are key drivers,” Gyrn says.
He adds that they have not been encountering barriers around finance or planning.
“Certifiers and councils are becoming increasingly familiar with prefabricated construction, and many appreciate the reduced site disruption and fast-tracked timelines.
“Finance institutions are also adapting, particularly when clients can present a clear, fixed-price construction methodology and proven delivery model like ours.”
Supply chain price rises, which have been affecting conventional construction, have also not been troubling the business. Gyrn says it has remained “largely insulated from significant disruption.”
“Our vertically integrated model, paired with long-term supplier relationships and our DfMA approach, allows us to forecast and control materials usage with precision.”