Prefabricated Building, MMC, Smart Building.

What the evidence shows.

A note on evidence and definitions: The UK’s MMC Definition Framework is the global reference (categories 1–7) used by government, warranty providers and lenders. It stops apples-to-oranges comparisons and enables like-for-like benchmarking. Australia is exploring adoption of a similar taxonomy in our national guidance and certification so that we can measure properly.

1) Speed and predictability (Australia + UK)

  • The Australian Government has explicitly backed prefab and modular to accelerate delivery, funding a national program—including a voluntary national certification for offsite construction—and noting that prefab/modular homes can be built up to 50% faster than traditional builds. That commitment is now in the Federal Budget and policy record.

  • In Victoria’s Permanent Modular School Buildings program, the state is delivering architect-designed permanent buildings via offsite manufacture while site works proceed in parallel - cutting delivery time by up to half versus a traditional build and doing so at scale across more than 100 projects.

  • The UK’s Construction Leadership Council (CLC) tracks sector performance. During 2020, on-site time fell by nearly a quarter and waste fell 15%, with MMC adoption a major driver of those productivity improvements across the housing pipeline. 

2) Quality, assurance and compliance

  • The Australian Building Codes Board issued a dedicated handbook in 2024: New Prefabricated, modular and offsite construction handbook and maintains technical resources that clarify how factory-built systems demonstrate NCC compliance - including pathways for certification and inspection. 

  • In the UK, lenders and warranty providers rely on NHBC Accepts and BOPAS to vet offsite systems (design, manufacturing controls, installation) and de-risk mortgages and warranties. These schemes exist to stop poor practice being “baked into” factories and to give financiers, valuers and consumers’ confidence.

  • Homes England’s Monitoring & Measuring program codifies the outcomes to track on MMC housing (predictability, quality, cost, carbon, safety, etc.), aligning with the CLC Smart Construction Dashboard. PrefabAUS believes we should adopt the same metrics locally.

3) Cost and finance (less volatility, growing lender comfort)

  • Prefab and modular building is not automatically cheaper, especially at sub-scale. But cost predictability is consistently better when you shift weather risk, rework and site variability into controlled production and parallel programs. That’s why lenders are moving. For example, Commonwealth Bank now offers progress payments up to 80% of factory production costs for prefab housing—a practical answer to the old “you can’t finance the factory” objection.

  • Internationally, the most cited meta-analysis (McKinsey) finds 20–50% schedule reductions and up to ~20% cost savings where design, procurement and logistics are integrated, conditional on scale and standardisation. This is exactly what government pipeline support and certification are designed to unlock.

4) Safety and buildability 

  • Factory assembly reduces exposure to the biggest on-site risks (work at height, manual handling, weather). The UK’s Health & Safety Executive data and guidance make the general link between better Health & Safety management and fewer incidents/costs. Offsite shifts the work into environments where those controls are stronger and more auditable. 

5) Environmental performance (waste and embodied carbon)

  • The UK’s WRAP and BRE have long documented 70–90% reductions in construction waste when you move to factory production with standardised components and controlled off-cuts. That’s not a “maybe”—it’s been replicated across multiple systems.

  • Life-cycle evidence on embodied carbon is nuanced (material and logistics choices matter), but peer-reviewed studies consistently show that prefabrication can lower embodied impacts by optimising material volumes and enabling design for disassembly—and Australia’s own research flags the need to target high-EC materials in housing. MMC gives us the industrialised levers to do that.

6) Social and regional outcomes (the use-cases that matter)

  • When the objective is rapid, high-quality social housing in remote or weather-exposed regions, modular has already proven its worth. Queensland’s QBuild program has delivered factory-built homes quickly to towns like Cunnamulla, precisely because offsite is less weather-affected and more logistically reliable.

  • Queensland and federal pipelines are pairing regional jobs in manufacturing with fast deployments, from classrooms to housing.

Additional notes

Compliance vs quality

Compliance is the minimum; quality variance (defects, tolerances, finishes) is where factory controls and traceable QA records show their advantage. That’s why NHBC Accepts/BOPAS and Homes England’s metrics focus on process control, repeatability and outcomes (predictability, defects, customer satisfaction).

Moisture and fire protection

These are design/installation issues governed by the NCC, not inherent flaws of MMC. Offsite simply relocates assembly; it does not waive compliance. The ABCB’s Handbook lays out how systems demonstrate performance through evidence of suitability, traceable QA, and (in coming months) a national offsite certification pathway to streamline approvals while maintaining quality.

“Over-engineered” modules

Some volumetric modular systems add structure for transport. That’s an optimisation problem, not a fatal flaw. Panelised (Category 2) or sub-assemblies (Category 5) often reduce steel and concrete relative to BAU while still delivering factory precision and parallel programs—choose the right MMC category for the outcome. The UK framework exists to help clients make that choice. We are exploring a similar framework as part of the ABCB scheme.

Finance

The “banks won’t fund factories” argument is already changing. CommBank’s product for factory progress draws is live, and government pipelines plus certification are there to de-risk further. Lenders respond to repeatable QA and recognised assurance—another reason to explore NHBC/BOPAS-style schemes adapted to the Australian context.eeeee