The New South Wales government has unveiled a plan to overhaul the state’s residential construction sector, committing to the establishment of a world-class modern methods of construction (MMC) innovation facility to build high-quality homes faster.
The 2026–27 NSW Budget will invest in the facility to harness advanced prefabrication, digital technologies, and modular construction to significantly slash build times and ease mounting cost pressures across the local supply chain.
A two-stage competitive tender process will open in the coming weeks, inviting experienced local and international operators to partner with the government to deliver modular housing at scale.
Successful proponents will focus heavily on manufacturing medium-density homes based on the NSW government Pattern Book designs.
The program builds on the landmark Building Bill 2026, which formally legalises prefabricated buildings and integrates MMC directly into the state’s approvals system.
To support these reforms, the state government is investing AU$32.3 million over four years to modernise building approvals. This includes introducing AI tools to the NSW Planning Portal to accelerate licence processing and establishing a national MMC certification system.
In addition, a AU$4 million investment will launch on June 29 through the Housing Innovation in Construction Fund and the Housing Innovation Network Grants Program, offering grants up to AU$250,000 to help local manufacturers and small businesses pilot innovative housing products. Government procurement will also be restructured to expand MMC utilisation in public projects like schools and hospitals.
NSW Premier Chris Minns said that the housing pressures facing NSW demand new technology and fresh thinking.
“Housing is one of the biggest challenges facing our state, and we are pulling every lever to build more homes, faster,” Minns said.
“The way we build homes has barely changed for generations.
“That’s why we are backing modern methods of construction that can deliver high-quality homes faster, reduce construction times and help take pressure off costs.”
Housing remains the number one-cost-of living concern facing NSW families. Forecasts show that NSW would build just 36,000 homes a year over the next five years.
To address the housing problem, the state government has introduced the most comprehensive set of reforms to housing in a generation, including the biggest set of rezonings in Australia’s history, including the Transport Oriented Development program, the Low and Mid-Rise Housing policy and the Housing Delivery Authority.
