A new report from the Committee for Economic Development of Australia (CEDA), produced in partnership with Urbis, has found that scaling and adapting modern methods of construction (MMC) could be a key to unlocking Australia’s housing supply and easing the nation’s worsening housing shortage.
‘Built Different: Modern Methods of Construction’ found that MMC could cut construction times by 20% to 50% and reduce costs by around 20% when implemented at scale. MMC includes prefabrication, off-site manufacturing, modular or volumetric building, 3D printing, robotics, and AI integration processes.
“The National Housing Accord target of 1.2 million new dwellings by 2029 is ambitious, and current progress is falling short.”
Danika Adams, Head of Research, CEDA
The report found the speed at which new dwellings can be delivered is a critical constraint on supply. It found productivity has also deteriorated, with dwellings built per construction worker falling 40% since the 1970s. Build times have increased by 40% since the pandemic, and construction costs have surged 88% since 2014/2015.
“Modular construction is currently used for less than 5% of new Australian homes. Given housing supply is constrained by how slow and expensive it has become to build, modern methods of construction offer a practical way to improve that.
“Traditional construction is not keeping up. These methods already exist, they work, and the challenge now is scaling.
“We know this is a system-wide challenge, which means it also needs a system-wide response. To scale modern methods of construction, we need better alignment across planning, regulation, procurement, finance and the supply chain so industry has the confidence to invest and deliver at scale.”
Clinton Ostwald, Partner, Urbis
CEDA and Urbis are calling on state governments to lead this adoption, examine and update regulatory frameworks around MMC and consider how this scaling could benefit regional and social housing. Particularly at a time where housing and productivity both remain in the
spotlight following ambitious Federal and State Budgets.
CEDA stated that while the benefits are clear, the report identifies barriers to implementation including fragmented regulation, inconsistent standards, financial constraints and workforce capability gaps.
“This is not a silver bullet, but with coordinated policy and united support from industry and government it is a tangible, scalable and evidence based way to build more homes, faster and at lower cost.”
Danika Adams, Head of Research, CEDA
CEDA and Urbis encourage governments to treat MMC as a central tool for unlocking housing supply at a time of critical national need.
