Three States, One Direction: Australia’s Smart Building Momentum Builds

In a remarkable convergence of policy activity, Queensland, New South Wales and Victoria have each made landmark commitments to Modern Methods of Construction — removing longstanding barriers and confirming that prefabricated construction is now central to Australia’s housing policy agenda.

Queensland: An Industry Reset

Queensland fired the opening shot on 21 January 2026, when the Crisafulli Government released its response to the Queensland Productivity Commission’s Final Report into construction industry productivity. The findings were stark: productivity in the sector has declined 9 per cent since 2018, equating to 77,000 fewer homes — and labour productivity has grown just 5 per cent over the past 30 years, against 65 per cent across the broader economy over the same period.The government agreed or agreed in principle to 51 of the report’s 64 recommendations. For the Smart Building sector, the most significant commitments include the permanent removal of Best Practice Industry Conditions (BPICs) from procurement policy — already enacted in January 2026 and projected to save taxpayers up to $20.6 billion over five years — alongside a commitment to performance-based, production-neutral procurement that removes a structural bias against MMC in government projects.On regulation, the government explicitly acknowledged the QPC’s advice to equalise the playing field between conventional construction and MMC. It committed to participating in the ABCB’s voluntary manufacturer certification scheme (expected to be delivered in 2028) and engaging with the National Competition Policy reforms. A TAFE Queensland training review will also ensure MMC skills are appropriately represented in workforce programs — critical as Queensland scales its 50 per cent MMC target for government projects ahead of the 2032 Olympic and Paralympic Games.

NSW: Ending the ‘Moveable Dwelling’ Trap

For years, one of the most frustrating barriers facing NSW prefab manufacturers has been a piece of legislation designed for caravans. Under Section 68 of the Local Government Act 1993, manufactured homes intended as permanent dwellings have been classified as ‘moveable dwellings’ — a framework built for holiday parks, not high-quality modular homes. The result has been inconsistent council assessments, financing complications, and approvals uncertainty that has deterred investment.That is now set to change. The Minns Labor Government’s Building Productivity Reforms, announced November 2025 and due before NSW Parliament in 2026, will formally recognise prefabricated and modular building work as ‘building work’ under law, mandating compliance with the Building Code of Australia and replacing the patchwork of inconsistent council approvals with a single statewide pathway. The reforms also introduce clear rules for manufacture, supply, transport, delivery and installation; a new licensing framework for key roles; and consumer protections including statutory warranties and prescribed progress payment structures. NSW Building Commissioner James Sherrard described the changes as providing “long-needed clarity” for the sector.Critically, the reforms are expected to improve access to finance. By requiring a contract in place and BCA compliance, banks will have the certainty needed to lend against prefabricated homes — addressing a structural barrier prefabAUS has long identified as central to sector growth. The reforms arrive alongside NSW’s commitment to 80 per cent prefabricated components in its housing pipeline by 2031.

Victoria: Roadmap Recommendations Become Policy

Victoria made its own landmark contribution in December 2025, publishing ‘Shaping the Future of Construction in Victoria: Modern Methods of Construction’ — a formal government statement that consolidates a suite of MMC commitments into a single policy framework. For prefabAUS members, the document is concrete evidence that the Industry Roadmap is working.Multiple Roadmap recommendations are now reflected in Victorian policy: MMC has been formally named a driver of outcomes in the Victorian Industry Policy; the 2024–25 State Budget has funded regulatory reform aimed at achieving parity with traditional construction; the Domestic Building Contracts Act 1995 has been amended to recognise projects with moderate and high proportions of MMC, with regulations to adjust progress payments accordingly; and the $50 million Future of Housing Construction Centre of Excellence at Melbourne Polytechnic’s Heidelberg campus is now underway as the first national hub for MMC training, skills and applied research. Government procurement across schools, health infrastructure, social housing and regional worker accommodation continues to be deployed as a lever to build market confidence at scale.

A Sector at an Inflection Point

Taken together, these developments represent exactly the systemic change that prefabAUS’s advocacy has been working toward. The regulatory barriers, financing obstacles and approval inconsistencies that have constrained the Smart Building sector for years are being addressed simultaneously, in multiple jurisdictions, as part of coordinated national housing policy.As prefabAUS Executive Chairman Damien Crough has noted, the sector is “winning nationally, and winning state by state.” Queensland, NSW and Victoria have each, in their own way, confirmed that Smart Building is no longer asking for a seat at the table — it has one.