New South Wales has earmarked funding in its 2026–27 budget for modern methods of construction (MMC), including investment in a local prefabrication manufacturing facility — a move the Property Council says could be transformative for housing delivery in the state.
The urgency is real — NSW is on track to deliver approximately 258,000 homes over the Housing Accord period, around 69% of its 376,000 target, according to the NHSAC's State of the Housing System 2026 report.
Property Council NSW executive director Katie Stevenson (pictured) said the budget investment directly targeted one of the structural barriers holding back faster delivery.
"One of the biggest challenges holding back MMC has been reliance on offshore manufacturing, so this investment is a welcome practical solution," Stevenson said.
The budget measures include support for prefabrication, initiatives to streamline delivery, and broader reforms to integrate modular construction into planning and procurement frameworks.
The Property Council has long flagged construction productivity as the missing piece in NSW's housing equation. Its 2026–27 pre-budget submission identified MMC as critical to tackling rising construction costs, labour shortages, and a persistent slide in productivity — all factors constraining new housing delivery.
"We've consistently made it clear that without a step change in productivity, NSW will continue to fall short of its housing targets," Stevenson said. "Today’s announcement demonstrates the government's commitment to partnering with industry on innovative solutions that can help unlock supply."
The industry body is also an active member of the NSW Government's MMC Taskforce, working alongside government to dismantle barriers to wider adoption of modern building methods.
According to CEDA's Built Different report, MMC can reduce construction times by 20 to 50% — meaning fewer construction loan extensions and less off-the-plan settlement risk for clients.
Stevenson said the budget announcement added urgency to one outstanding legislative item — the Building (Approvals and Practitioners) Bill 2026, which returns to the NSW Parliament next week.
"This bill tackles some of the biggest barriers to MMC — unclear approvals pathways, inconsistent decision-making, and limited confidence in new construction methods," she said. "Fixing these issues is critical to unlocking faster, more productive housing delivery.
"Modular and prefabricated construction can cut build times by up to 50%, reduce waste, lower emissions, and improve quality — it's exactly the kind of innovation we need to build more homes and deliver them faster," Stevenson said — a direct benefit for first-home buyers pursuing house-and-land packages and investors targeting new builds to retain access to negative gearing concessions.
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