Australia’s construction industry is under increasing pressure to deliver housing more efficiently, sustainably, and at greater scale. Rising costs, strained labour markets, and ambitious housing targets are prompting the sector to rethink how it builds. The solution lies not in new inventions, but in scaling proven approaches: Modern Methods of Construction (MMC), particularly prefabricated modular systems.

MMC encompasses a range of systems, processes and products designed to improve efficiency, value and sustainability across the project lifecycle. Yet while the industry already uses elements such as bathroom pods, curtain wall facades and prefabricated panels, modular construction still tends to be applied only in low-rise and niche projects – far from the medium-to-high density settings where its impact could be most transformative.

This is the paradox: we have the tools and the principles, but we are not applying them at the scale or complexity where they can deliver the greatest benefit. The challenge is not invention, but adoption across larger, more complex projects.

The efficiency gains aren’t theoretical. College Road in Croydon, UK, completed in 2023, delivered 73% of its total floor area through modular construction in 40 weeks, while the remaining 27% via traditional in-situ methods required 94 weeks.

Successful MMC adoption is shaped by three key influences: procurement and risk allocation, supply chain capacity, and complexities in planning and consent authority approval processes.

*81-83 George St Parramatta, designed by FK*

What would actually unlock scale?

Focus on the economic tipping point

The application of "scale" is critical in MMC integration, where each project benefits from a program-focused approach. For a development like Freecity Group’s new 81–83 George Street Parramatta with 383 apartments designed by FK, this timeline compression creates multiple compounding benefits:

Reduced financing costs: 12-18 months of construction finance saved
Earlier revenue generation: BtR projects can commence leasing while comparable traditional developments remain in construction
Certainty premium: Fixed factory schedules eliminate weather delays, trade coordination bottlenecks, and sequential dependencies that plague site-based construction
Risk reduction: Shorter construction periods mean less exposure to market volatility, labour shortages, and cost escalation

This is why procurement should be considered in clusters – multiple projects adopting standard layouts and feeding coordinated production schedules.

Can supply keep up?

The Build-to-Rent tower at 81–83 George Street, Parramatta is currently designed utilising MMC approach, and is NSW’s largest volumetric modular construction project. This landmark development represents a significant milestone: delivering 383 thoughtfully designed Build-to-Rent (BtR) apartments above an activated mixed-use podium through volumetric modular construction (VMC), marking the first mandatory VMC competition in NSW and nationally.

The project brief posed a clear challenge: to deliver highly repetitive modular units that could adapt to complex urban conditions, embedding volumetric parameters from the very outset. Module dimensions were set in line with NSW logistical and transport constraints, effectively codifying MMC principles for all competing teams.

*81-83 George St Parramatta apartment layouts, designed by FK*

The George Street development requires approximately 1,500 modules – a volume that exposes critical supply chain realities. Current combined production capacity across Victoria and NSW is roughly 1,000 modules per month: approximately 600 from Victorian manufacturers (Modscape, Fleetwood, Prebuild, Rendine) and 400 from NSW facilities.

At first glance, this suggests adequate capacity. In reality, manufacturers operate diversified order books across residential, commercial, and smaller-scale projects. They cannot simply redirect entire production to one development without abandoning existing commitments and accepting concentrated risk exposure on a single contract.

The scale challenge becomes clear: If even 10% of Australia's 1.2 million home target were delivered via VMC over five years (120,000 homes), that represents approximately 24,000 dwellings annually. Assuming four modules per dwelling, that's 96,000 modules per year – eight times the current combined capacity.

This isn't a temporary bottleneck to be solved through incremental expansion. It requires strategic capacity building across multiple dimensions:

Forward commitment models that de-risk manufacturer investment through multi-project pipelines, allowing domestic producers to scale with confidence in sustained demand rather than boom-bust project cycles.

Global supply chain integration that leverages established international manufacturing capacity where it offers proven performance. Australia already imports bathroom pods, curtain wall systems, and prefabricated façade components – extending this approach to complete modules is a natural evolution, particularly for highly standardised, repeatable residential typologies.

Domestic manufacturing repositioning to focus on higher-complexity work: customised components requiring site-specific adaptation, podium and transfer deck elements, specialised building services integration, and projects where transport logistics favour local production.

Regulatory reform needed

Achieving scale requires planning policy to lean into MMC principles. The efficiency of MMC lies in standardisation of building components, with assurance that approved designs can be manufactured at scale and applied across multiple sites.

Currently, each planning application is assessed separately – either at State level through State Significant Development Applications, or locally through Development Applications. Each assessment can result in design commentary that modifies apartment layouts, even when layouts are identical to previously approved projects. There is no planning pathway that allows consent authorities to apply pre-approved modular layouts across different sites without complete re-assessment.

This is where NSW Government Pattern Books offer a compelling model. By establishing standardised, pre-approved templates for residential typologies, they expedite assessment for designs that meet established performance criteria. Queensland's QBuild MMC Program has effectively codified similar standards into a statewide playbook that streamlines modular housing delivery.

The critical principle: Customisation to each planning application destroys the economic viability of MMC. When every project requires bespoke apartment layouts, manufacturers cannot achieve the production runs necessary for cost and timeline efficiency. State-level MMC guidelines would establish confidence that approved modular designs can be deployed repeatedly, justifying investment in specialised tooling and production optimisation.

Diversifying skills along the supply chain

The industry's future lies not in replacing skilled workers on site, but in creating safe, controlled work environments that attract diverse talent. Factory-based construction eliminates many site hazards while opening opportunities for a greater range of skills. This workforce evolution strengthens our industry while spreading job creation down the value chain, from factory production and logistics coordination to specialised assembly and quality control roles.

The road ahead

The building blocks for transformation already exist. With a number of successful precedents of VMC design and delivery at precinct scale, such as Greenford Quays and College Road in the UK, 81-83 George Street's preliminary manufacturing timeline suggests significant construction period compression compared to traditional methods for projects of comparable scale.

These aren't future possibilities – they're present realities waiting for regulatory frameworks, procurement models, and industry conventions to catch up.

FK's competition-winning design for Freecity's BtR development demonstrates that MMC methodology can be successfully applied to mixed-use typologies and complex urban contexts. Realising its broader potential requires building a system that supports widespread adoption:

Regulatory frameworks that enable standardisation without stifling design quality – pattern book approaches that provide planning certainty for repeated layouts across multiple sites
Supply chain evolution that embraces both domestic capacity expansion and global manufacturing capabilities where they offer proven performance
Industry-wide commitment to forward pipeline commitments that de-risk manufacturer investment in expanded capacity

The question is no longer whether MMC works, but how quickly the industry can scale proven approaches to meet housing demand that traditional construction methods simply cannot satisfy within required timeframes.

The last 12 months has seen some progress, with the Federal Government's investment of $54 million in advanced manufacturing of prefabricated and modular home construction in March 2025, and more recently Homes NSW and Building 4.0 CRC's kit-of-parts System 600, raising broader awareness of MMC's viability in tackling the scale and quality of housing supply.

What is needed now is a broader understanding and education of the benefits of applying these methods at scale to create a more efficient, sustainable, and inclusive construction industry.

This article is authored by Helen Kuo, Principal, FK Sydney.

Images: Supplied

Scaling modern methods of construction in Australian housing

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