Manufacturing is at the centre of a new industry-wide contract launched by PrefabAUS to support the faster delivery and financing of factory-built homes across Australia.
The PrefabAUS Standard Form Contract for Class 1 Domestic Construction has been developed with sponsorship from Commonwealth Bank of Australia (CommBank) to better align building contracts with the offsite manufacturing processes used in prefabricated housing.
In a news release, PrefabAUS Executive Chairman Damien Crough said existing construction contracts were largely designed around traditional, site-based building and did not adequately reflect the timelines and requirements of modern methods of construction (MMC).
“For too long, prefabricated construction has been constrained by contracts designed for traditional, site-based delivery,” Crough said.
He said the new contract was intended to provide greater clarity around how homes are manufactured, transported and completed, while aligning payments with factory production milestones.
“This new standard form contract provides the clarity and structure needed to better support how these homes are delivered, helping unlock investment, improve productivity and scale the growth of the modern construction industry in Australia,” Crough said.
According to PrefabAUS, the contract is intended to give buyers clearer information on costs, responsibilities and construction stages, while providing manufacturers and builders with a more consistent framework for managing projects and cash flow.
PrefabAUS said prefabricated homes can be delivered in as little as eight to 12 weeks, compared with 12 to 24 months for traditional construction, although the contract itself does not guarantee specific delivery times.
CommBank Home Buying General Manager Rebecca Markwell said modern construction methods could contribute to addressing housing supply pressures.
“Modern methods of construction have the potential to help address Australia’s housing shortage by delivering homes faster and more efficiently,” Markwell said.
CommBank has also introduced lending changes for prefabricated housing, including allowing progress payments during the offsite construction phase. The bank said this could reduce the need for large upfront payments by customers.
“Working with the industry to support innovation in construction and remove barriers for adoption of modern methods of construction, including sponsoring the development of a standardised contract, is all part of how CommBank is supporting the delivery of more housing supply to the market,” Markwell said.
PrefabAUS said the contract is now available to industry participants, with further work planned to digitise it and streamline its use across projects.
The initiative forms part of priorities identified in the PrefabAUS Industry Roadmap 2023–2033, including greater use of design for manufacture and assembly, procurement and contracting reform, and improved access to finance for MMC projects.
