NSW Grants Open a New Pathway for Smart Building Manufacturers

The New South Wales Government has opened applications for two new grant programs representing a combined investment of nearly $4 million in the state's Smart Building sector. For prefabAUS members, the announcement is more than a funding opportunity. It is evidence that the policy architecture outlined in the prefabAUS Industry Roadmap is taking shape.

The Housing Innovation in Construction Fund and the Housing Innovation Network Grants Program were launched jointly on 29 June 2026 by Minister for Housing Rose Jackson and Minister for Building Anoulack Chanthivong. Together, they address two distinct but complementary gaps that have long limited the Smart Building sector's ability to scale: manufacturer capability at the mid and high-rise end of the market, and the need for real-world testing environments where innovative housing products can prove themselves before broader rollout.

Bridging the Class 2 Gap

The $2 million Housing Innovation in Construction Fund targets one of the sector's most significant barriers to growth: the transition from Class 1 residential work to Class 2 mid- and high-rise housing. The prefabAUS Industry Roadmap has identified this as a critical capability gap, and this fund directly addresses it.

Grants of between $20,000 and $150,000 are available to support engineering feasibility studies and compliance assessments, helping manufacturers benchmark their designs and processes against the National Construction Code and NSW regulatory requirements. Funding is provided on a co-contribution basis, with applicants required to contribute at least 50 per cent of total project costs.

Importantly, the program is open not only to domestic Class 1 providers looking to expand upward, but also to internationally based manufacturers with existing Class 2-equivalent capability who are seeking to enter the NSW market. This is a signal that NSW is actively building a pipeline of capable operators, not simply supporting existing players.

The program closes on 31 May 2027 or earlier if funds are fully allocated. Applications are assessed on an ongoing basis, which means there is a practical advantage to applying early.

Real-World Pilots Through Homes NSW

The $1.8 million Housing Innovation Network Grants Program takes a different but equally important approach. Rather than funding capability assessment, it funds market entry: competitive grants of up to $250,000 are available to NSW small-to-medium enterprises to pilot innovative housing products in real Homes NSW public housing environments.

Pilot projects will test digital tools, building materials and service innovations, with funded pilots expected to run for up to 12 months between late 2026 and 2027. The program will be delivered alongside workshops and networking events designed to build sector knowledge and skills.

For smaller Smart Building businesses that have developed products but lacked access to government housing pipelines to test them at scale, this program fills a structural gap that the Roadmap has long identified as a constraint on market development.

Part of a Larger Policy Architecture

The two programs do not stand alone. The NSW Government has described them as part of a growing suite of reforms that also includes an invitation to local and international operators to partner on a world-class MMC manufacturing facility, the introduction of the Building Bill 2026 to NSW Parliament, and a $32.3 million investment to modernise the building approvals system and pilot AI tools for licence processing.

Taken together, these measures reflect the kind of coordinated, multi-lever approach to market development that prefabAUS's Industry Roadmap has consistently argued is necessary. Regulatory reform, procurement pipeline certainty, and targeted manufacturer support need to work in combination. NSW is increasingly delivering on all three.

prefabAUS Response

prefabAUS Executive Chairman Damien Crough welcomed the announcement.

"The NSW Government's investment in both the Housing Innovation in Construction Fund and the Housing Innovation Network Grants Program sends a clear signal that Modern Methods of Construction are now central to how Australia solves its housing challenge. For prefabAUS members, particularly manufacturers and SMEs who have been building capability for this kind of market opportunity, these programs provide a tangible pathway to demonstrate what Smart Building can deliver at scale. We welcome the momentum NSW continues to show, and we encourage eligible members to engage with both programs promptly."

Applications for the Housing Innovation in Construction Fund are open now at https://www.nsw.gov.au/business-and-economy/innovation/grants-and-programs/housing-innovation-construction-fund.