How NSW is embracing factory-built homes

The state will back a new factory‑style approach to home building in a bid to speed up housing delivery, with the NSW budget set to include a big investment in modern construction methods. 

As part of the 2026–27 NSW budget, the government has confirmed it will invest in modern methods of construction (MMC), supporting a new facility designed to help build homes faster across the state. 

A modular home built in Wollongong, NSW. Picture: NSW government

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The facility is expected to build new housing through MMC, including prefabrication, modular construction and digital technologies. 

Prefabricated construction involves building some or all parts of a home off‑site before transporting them to site for assembly.  

Because of the efficiencies gained by offsite construction – such as reducing weather delays and carrying out work concurrently on site – prefab and modular construction can significantly cut build times, reduce waste and improve quality control compared with traditional building methods. 

The first phase of the factory project will involve a public tender, inviting experienced local and international MMC operators to partner with the state on creating prefabricated components and modular housing at scale. 

Premier Chris Minns said the investment formed part of the government’s efforts to “pull every lever to build more homes, faster”. 

“The way we build homes has barely changed for generations – but the housing pressures facing NSW demand new thinking, new technology and new solutions,” he said. 

“That’s why we are backing modern methods of construction that can deliver high‑quality homes faster, reduce construction times and help take pressure off costs.” 

NSW minister for planning and public spaces Paul Scully said the facility would deliver medium‑density homes based on the state’s Pattern Book designs — a collection of architect‑designed plans intended to streamline the delivery of low‑ and mid‑rise housing across NSW. 

“By linking the facility to the Government Architect’s Pattern Book, we’re creating a direct pipeline from design through to approval and construction of new homes,” he said. 

“Supporting the expansion of modern methods of construction will help improve construction industry productivity and that means homes will be built faster and to a consistent, quality standard.” 

A render of the Corner Lot Apartments 01 design by Tonkin Zulaikha Greer. Picture: NSW government

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To support the growing MMC industry the NSW government is investing $32.3 million over the next four years to modernise the building approvals system, integrate it into the NSW Planning Portal and pilot AI tools to speed up licence application processing. 

This includes a $1.6 million investment to establish a new regulatory framework and introduce a national certification system for MMC, aimed at giving industry greater confidence to invest locally. 

As part of this, from June 29 2026, two new programs will open: 

• The Housing Innovation in Construction Fund, offering grants of $20,000 to $150,000 for established manufacturers to adapt MMC for use in mid‑ and high‑rise housing. 

• The Housing Innovation Network Grants Program, delivering grants of up to $250,000 to help small‑to‑medium enterprises explore MMC and pilot innovations such as digital tools, new materials and construction services. 

In a further boost, the government has also announced reforms to procurement to open up more opportunities for MMC projects across NSW.  

Momentum building 

The announcement follows growing interest in off‑site manufacturing across Australia. 

In Western Australia, Built Living — a joint venture between Wesfarmers and Built Group — is preparing to build new apartments at scale through a purpose‑built manufacturing facility, supported by a long‑term land‑lease agreement and a $20 million incentive from the WA government. 

Industry groups have welcomed the NSW measures, arguing that modern construction methods will be essential if the state is to meet its housing targets. 

The Property Council of Australia described the new manufacturing facility as a potential “gamechanger” for housing delivery. 

Property Council NSW executive director Katie Stevenson said NSW would not meet its housing targets without changing how homes are built. 

“NSW needs more homes, faster, and that means embracing new construction methods that can deliver at scale,” Ms Stevenson said. 

“One of the biggest challenges holding back MMC has been reliance on offshore manufacturing, so this investment is a welcome practical solution.” 

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