The federal government has committed $54 million to support the expansion of prefab and modular construction, recognising it as a critical solution to the nation’s ongoing housing supply issues, against the backdrop of a significant housing shortfall, PropTrack reported.
In 2024, Australia saw a housing shortfall of 62,000 homes, better than the previous year’s 110,000 deficit, primarily due to slower population growth rather than a significant increase in construction, which only saw an addition of 4,400 homes.
This substantial investment aims to address the urgent need for rapid housing development by facilitating the construction of homes that are largely built offsite and then assembled on location.
Prefabricated homes offer a quicker alternative to traditional building methods, potentially halving the time required to construct new homes.
Despite their efficiency, prefab homes have historically encountered obstacles such as prolonged planning approvals and complex financing options for prospective homeowners.
To overcome these challenges, CommBank has teamed up with prefabAUS, representing Australia’s offsite construction sector, to streamline financing processes for buyers of prefab homes.
In preparation for the 2025 federal budget, the government revealed plans to allocate $49.3 million to assist states and territories in developing local initiatives that encourage prefabricated and modular housing.
An additional $4.7m is designated for establishing a voluntary national certification process to hasten approval times for offsite construction projects.
The funding announcement has been met with enthusiasm from various industry leaders.
The Property Council of Australia and the Housing Industry Association have recognised the potential of modular homes to meet sustainability standards quickly and to alleviate the acute housing shortage.
Mike Zorbas (pictured), chief executive of the Property Council, highlighted the need for a consistent demand pipeline and supportive regulations to scale up production effectively.
Despite the positive steps, industry experts like Jocelyn Martin, managing director of HIA, emphasised that additional reforms are essential, PropTrack reported.
Martin called for an overhaul of the planning system and increased investment in infrastructure to support housing development.
She also pointed out that workforce shortages need to be addressed to boost construction rates.
Furthermore, the Urban Development Institute of Australia has urged the government to invest $5 billion in infrastructure projects to expedite new housing developments.
UDIA National President Col Dutton stressed the importance of unlocking housing through better-funded and developed enabling infrastructure and faster planning approvals.
This strategic federal funding is an effort to streamline the construction process and boost the availability of homes, aiming to mitigate the ongoing crisis in housing supply effectively.
