The NSW Government will fund a new modular housing manufacturing hub as part of its upcoming state budget, aiming to increase housing supply through faster and potentially lower-cost construction methods.
In a news release by CommBank, the planned Modern Methods of Construction Innovation Facility will be established through a partnership with a private manufacturer and will focus on producing prefabricated and modular housing.
The government said the facility is intended to deliver high-quality homes more efficiently, while reducing construction timeframes and costs.
Premier Chris Minns said the initiative forms part of the state’s broader response to housing pressures.
“The way we build homes has barely changed for generations, but the housing pressures facing NSW demand new thinking, new technology and new solutions,” Minns said.
A key focus of the facility will be the production of medium-density homes using existing pattern book designs, which the government says can help streamline planning approvals. The manufacturing centre could also be used to deliver public infrastructure, including schools and hospitals.
Treasurer Daniel Mookhey described the proposal as “smart economic policy”, saying it would support both housing construction and the development of a new manufacturing industry in the state.
The announcement comes as NSW works towards a federal housing target requiring the delivery of 377,000 additional homes by the end of 2029, equivalent to around 75,000 homes each year. While housing approvals have improved, the state remains behind the pace needed to meet the target.
Industry groups have welcomed the proposal while noting that broader reforms will also be needed to address housing supply challenges.
Community Housing Industry Association NSW chief executive Luke Achterstraat said modular housing could make a valuable contribution but should not be viewed as a standalone solution.
“We need to think outside the square when it comes to housing and modular housing, while not the only solution, is a great addition to the policy suite of options,” Achterstraat said.
Property Council NSW executive director Katie Stevenson said new construction approaches would be essential if the state is to meet its housing goals.
“NSW needs more homes, faster, and that means embracing new construction methods that can deliver at scale,” Stevenson said.
The NSW Government said a two-stage competitive tender process will open in the coming weeks, inviting domestic and international operators to partner on the development and operation of the facility.
