New Urbis and CEDA research explores MMC's ability to unlock faster, cheaper housing supply
A new report by the Committee for Economic Development of Australia (CEDA), produced in partnership with Urbis, highlights the role modern methods of construction (MMC) could play in unlocking housing supply and responding to Australia’s housing shortage.
The report, Built Different: Modern Methods of Construction, finds that approaches such as prefabrication, modular building and off‑site manufacturing can reduce construction time by 20 to 50 per cent and lower costs by around 20 per cent when applied at scale. At a time when productivity has declined and build times and costs continue to rise, delivery speed has emerged as a critical constraint on housing supply.
CEDA Head of Research Danika Adams said Australia needs to change how it builds, not just how much it builds.
“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.”
Despite these benefits, MMC currently accounts for less than five per cent of new housing in Australia. The report identifies fragmented regulation, inconsistent standards, financing challenges and workforce capability gaps as key barriers to broader uptake.
Urbis Partner Clinton Ostwald said scaling MMC requires coordinated action across the system.
“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," he said.
CEDA and Urbis are calling on state governments to lead the adoption of MMC, update regulatory frameworks and consider how these approaches can support regional and social housing delivery at a time of acute national housing need.
Key considerations for governments
In addition to the recommendations laid out in the report, Urbis has identified several key considerations for government and industry that further support the effective scaling of MMC:
- Manufacturing hubs and regional economic opportunity
Scaling MMC requires factories, and where those factories are located matters. Regions with existing trade skill concentrations, such as the Central Coast of NSW, or areas navigating post-mining transition, such as the Upper and Lower Hunter, offer compelling locations for MMC manufacturing hubs. Strategically locating production facilities can create regional employment, reduce urban commuter pressure and align housing delivery with economic development objectives. - Removing planning system friction
MMC has encountered delays or uncertainty in planning and approvals, including misalignment with design controls, certification pathways, transport restrictions and construction assumptions designed around traditional building methods. Targeted state‑level guidance and clearer approval pathways can help reduce friction without redefining land use categories. - The sustainability dividend
MMC delivers measurable environmental benefits that extend well beyond the construction phase. Factory-based production using standardised material lengths, centralised inventory and precision manufacturing significantly reduces construction waste and embodied carbon. These advantages should be recognised as a core benefit of MMC adoption. - Workforce diversification and labour supply impacts
Moving construction into controlled factory environments creates opportunities to broaden workforce participation, particularly for women and underrepresented groups who face practical barriers on traditional construction sites. Factory settings with proper amenities, fixed locations and shift-based rosters are inherently more accessible, and multi-shift operations can increase output beyond what traditional site-based work allows. - Government’s role in supporting scale
The most effective lever governments hold is not subsidy, it is demand. By setting MMC procurement targets across social housing, key worker accommodation, schools and health facilities, governments can provide a significant contribution to pipeline certainty that manufacturers need to invest at scale, while accelerating delivery of essential public infrastructure. - Sovereign manufacturing capability
Growing interest in importing prefabricated buildings into Australia raises important questions about long-term resilience. Dependence on offshore manufacturing exposes housing delivery to supply chain shocks, risks the atrophy of domestic skills, and foregoes the economic multiplier effects of local production. A deliberate strategy to develop domestic MMC capability is an investment in Australia's ability to build for itself through future disruptions. With global capacity in modular construction growing rapidly, government and industry need actionable, short-term objectives to be competitive on the world stage.
Read the full report here.
