The Six Conditions Required to Scale MMC in Australia

In May 2026, Urbis partnered with the Committee for Economic Development of Australia (CEDA) to release Built Different: Modern Methods of Construction, exploring how MMC could help address Australia's housing supply challenge.

Through our research with CEDA and industry engagement, a clear message emerged: the barriers to MMC adoption are increasingly understood, but the conditions required to support deployment at scale remain underdeveloped. Through our work across planning, development, infrastructure and housing delivery, several recurring themes continue to emerge, including pipeline certainty, demand creation, financing, workforce capability, union engagement, regulatory alignment and supply chain development.

None of these issues exists in isolation. Progress will depend on coordinated action across policy, planning, investment and delivery. If Australia is serious about increasing housing supply and addressing falling construction productivity in other sectors, the next phase of the conversation needs to focus on implementation.

1. Creating the pipeline needed for scale

Unlike traditional construction models, MMC relies on repeatability and volume to deliver its full benefits. Manufacturers need confidence that demand will be sustained over the long term before investing in facilities, workforce capability and production capacity. A reliable pipeline of work enables investment in manufacturing capacity, workforce development and innovation, while improving efficiency over time.

No single client or sector is likely to create sufficient scale on its own. Sustained demand across social and affordable housing, build-to-rent, purpose-built student accommodation, retirement living and public infrastructure will be critical to supporting long-term industry growth.

Government also has an important role to play. Procurement across social housing, key worker accommodation, education and health infrastructure can help provide the pipeline certainty needed to encourage investment. While government projects alone will not create an industry, they can lay the foundation and send a strong signal to the private sector. After all, if you want to grow a tree, someone has to plant the seed.

Creating that pipeline will require coordinated action across government, developers, investors, and manufacturers to generate sustained demand that supports investment and growth.

2. Align finance with a different delivery model

For MMC to achieve scale, financing models must evolve alongside construction methods. Traditional funding structures are geared towards on-site construction, while MMC often requires significant investment earlier in the delivery process, before building components reach site. This can add complexity, particularly when prefabricated components are sourced from offshore manufacturers.

The result is often a disconnect between how projects are funded and how they are delivered. Financing frameworks that better reflect off-site manufacturing can improve access to capital, reduce barriers to adoption and provide greater certainty for developers, manufacturers and investors.

Internationally, lenders are adapting to these delivery models, recognising that MMC operates as both a construction and manufacturing process. As Australia's MMC market matures, there is an opportunity to draw on these lessons and better align financing structures with how projects are delivered in practice.

Like pipeline certainty, finance plays a critical role in building industry confidence. Greater alignment between funding and delivery models can unlock investment, manage risk and support the sector's long-term growth.

3. Building capability for a maturing sector

As MMC adoption increases, capability must grow alongside it. Delivering projects at scale requires specialised skills, practical experience and greater familiarity with new delivery models and supply chains across the construction ecosystem. The most effective use of MMC requires buildings designed for the chosen system from the outset; retrofitting a traditional design to an MMC approach rarely realises the full potential of time and cost savings.

Building that capability extends beyond manufacturers. Designers, builders, certifiers, suppliers, and logistics providers all play a role in successfully delivering MMC projects from inception. Continued investment in skills development, training and industry experience will be important as MMC moves from demonstration projects to broader adoption.

A broader conversation is also emerging about how Australia develops its manufacturing capability. As interest in MMC grows globally, questions are increasingly being asked about the balance between strengthening domestic production and leveraging established international supply chains.

4. Reduce friction in the delivery process

MMC operates across a range of regulatory and operational environments. Planning systems, approval pathways and transport requirements vary between jurisdictions, creating different opportunities and challenges for project delivery.

As the sector grows, there is an opportunity to create greater consistency and certainty across the delivery process. This extends beyond planning and regulation to include transport, logistics and the movement of manufactured components to site. In some cases, practical considerations such as storage, staging areas and freight pathways can influence project feasibility just as much as the planning framework itself.

While each jurisdiction is approaching MMC from a different starting point, the challenge is ensuring planning, transport, regulation and delivery systems work together. Greater alignment across these areas could reduce uncertainty, support investment and help accelerate adoption at scale.

It is significant that Federal and State governments have made legislative changes and dedicated investment to support the growth of MMC approaches, helping make them part of the mainstream suite of approaches to address the ongoing housing crisis.

5. Looking beyond construction costs

Cost is often one of the first questions asked of MMC. However, focusing solely on construction costs risks overlooking broader benefits these approaches can deliver.

Faster delivery can improve project feasibility, bring revenue forward and reduce holding and financing costs. As the sector matures, there is an opportunity to evaluate MMC through a wider lens, recognising the value created across the full development lifecycle. Feedback from build-to-rent investors in the United Kingdom indicates that fully modular buildings have lower long-term maintenance costs, as greater quality control in the manufacturing process has led to fewer defects and longer asset lives for key components.

There is also growing interest in the environmental outcomes associated with MMC. Greystar’s Ten Degrees project in Croydon, United Kingdom demonstrated manufacturing efficiencies with 97% of factory waste recycled, an 86% reduction in onsite waste and 41% lower carbon emissions, providing a strong case study for adoption, particularly as sustainability considerations become increasingly important for investors, governments, and asset owners.

Developing a more holistic understanding of value will be important as industry continues to assess the role MMC can play in supporting housing delivery and broader economic, social and environmental objectives.

6. Building investor confidence

While much of the MMC conversation has focused on construction and manufacturing capability, investor confidence remains a critical enabler of adoption at scale. Questions around valuation, asset performance and long-term durability continue to influence investment decisions, particularly where investors have limited experience with MMC assets.

Many of these concerns reflect familiarity rather than evidence. Across Europe, North America and parts of Asia, MMC has been successfully delivered across residential, education, healthcare and commercial sectors for decades. These markets provide a growing body of evidence around asset performance, durability and long-term value.

As Australia's MMC sector matures, there is an opportunity to build greater awareness of this evidence base among investors, financiers, valuers and insurers. Consistent accreditation, robust performance data and greater transparency around project outcomes can help strengthen confidence in MMC as an investment proposition.

Investor confidence will be critical to broader adoption, with the challenge not simply demonstrating that MMC can improve delivery outcomes but providing confidence that assets will perform over the long term and meet the expectations of owners, occupants and capital markets.

While the policy settings, market conditions and opportunities differ across jurisdictions, there is increasing alignment on what will be needed to support MMC adoption at scale. The challenge is no longer proving that MMC works. Across Australia and internationally, a growing body of evidence shows the role it can play in supporting housing, infrastructure and broader development outcomes.

The next phase is about implementation. Creating the conditions for scale will require coordinated action across governments, investors, developers, financiers, manufacturers and delivery agencies. Those jurisdictions and organisations that move first will be best positioned to realise the economic, productivity and housing benefits that MMC can deliver.

MMC alone will not solve Australia's housing challenge. But it also won't be solved without new approaches to delivery.

The evidence base is growing, policy support is increasing and industry capability continues to mature. The question is no longer whether MMC can contribute to Australia's housing future. The question is whether Australia can create the conditions that allow it to scale.

Through our work across housing, student accommodation, build-to-rent, retirement living and public infrastructure, Urbis will continue to work alongside government, industry, investors, developers and manufacturers to better understand the role MMC can play in addressing Australia's housing and infrastructure challenges. As adoption grows, building the evidence base around project performance, delivery models and supply chain capability will be critical to supporting informed decision-making. Drawing on insights from Australian projects and international markets, we will continue to explore the opportunities and practical considerations associated with scaling MMC.

The future of MMC will be shaped by more than construction methods alone. It will depend on how effectively governments, industry and investors work together to create the conditions needed for long-term adoption and scale.