PrefabAUS launches industry-wide contract to help scale faster, factory-built housing

Sep 4

COMMS/MEDIA RELEASE - Wednesday 2nd September

PrefabAUS launches industry-wide contract to help scale faster, factory-built housing

The standard form contract, developed through sponsorship by CommBank, aims to simplify building and financing for buyers and manufacturers

Australia’s housing shortage is increasing the pressure to deliver homes faster, and to simplify how Australians build and finance them.

PrefabAUS has launched a new standard form contract for prefabricated homes, designed for use across the industry and available to builders, manufacturers, customers and lenders – regardless of which lender provides the finance.

The contract, developed through sponsorship by the Commonwealth Bank of Australia (CommBank), addresses a key barrier to the growth of prefabricated housing: existing contracts are designed for traditional construction, not homes that are manufactured offsite.

PrefabAUS Executive Chairman, Damien Crough, said the absence of a dedicated prefab construction contract that aligns payments and financing to factory-built timelines and recognises Modern Method of Construction’s (MMC) unique parameters has contributed to slowing the broader adoption of prefab housing in Australia.

“For too long, prefabricated construction has been constrained by contracts designed for traditional, site-based delivery,” Mr Crough said.

“This new standard form contract provides the clarity and structure needed to better support how these homes are delivered, helping unlock investment, improve productivity and scale the growth of the modern construction industry in Australia.”

A simpler approach for buyers and builders

The new contract is designed to better reflect how prefab homes are built – in factories and delivered in weeks, rather than constructed on-site over many months.

For home buyers, it helps:

Provide greater clarity on how prefabricated homes are designed, manufactured offsite, transported and completed
Make payments easier to understand, with defined stages that reflect how prefab homes are built
Improve transparency around costs, inclusions, responsibilities and key consumer protection.

For manufacturers and builders, it helps:

Provide a clearer framework for factory-built delivery, from design and manufacturing through to placement and completion
Align payments to prefab production milestones, supporting more predictable cash flow and project planning
Reduce contract complexity and improve consistency across projects, customers and lenders

Supporting industry growth

Prefabricated housing currently represents a small share of the Australian market, but has significant growth potential, particularly as Australia looks to deliver 1.2 million new homes by 1 July 2029.

Prefab homes can be built in as little as 8–12 weeks, compared to 12–24 months for traditional construction, highlighting their potential to help increase housing supply in a shorter time period.

Supporting broader access to housing

CommBank sponsored the development of the contract as part of its broader efforts to improve access to prefabricated housing.

In addition to the contract sponsorship, CommBank was the first major lender in Australia to introduce a prefabricated housing policy that allows customers to access funding earlier in the construction process – reducing the need for large upfront payments and helping more Australians consider this type of build.

CommBank Home Buying General Manager, Rebecca Markwell said: “Modern methods of construction have the potential to help address Australia’s housing shortage by delivering homes faster and more efficiently.

“We’ve already introduced changes to our lending policy to better support prefabricated housing, including enabling progress payments during the offsite construction phase.

“Working with the industry to support innovation in construction and remove barriers for adoption of modern methods of construction, including sponsoring the development of a standardised contract, is all part of how CommBank is supporting the delivery of more housing supply to the market.”

Supporting the prefabAUS Industry Roadmap

The PrefabAUS Standard Form Contract for Class 1 Domestic Construction, such as residential single detached homes is now available to industry participants, with further work underway to digitise the contract and streamline its use across projects.

The release of the contract directly supports key priorities outlined in the prefabAUS Industry Roadmap 2023–2033: Building the Future We Want, particularly: