Regulatory barriers associated with prefabricated and modular construction: Final report

This project focused on the regulatory barriers that prevent greater take-up of prefabricated (prefab) and modular construction. It sought to identify those barriers in the Australian context and made recommendations to overcome them. The project has been initiated by Housing Industry Association (HIA) and carried out by Swinburne University of Technology (SUT). It is part of a series of projects supported by the Advanced Manufacturing Growth Centre (AMGC) Prefab Innovation Hub which commenced in 2019 to support Australia’s manufacturing and building and construction industry harness the potential benefits of prefabrication. The investigation included review of overseas practice, including countries where prefabricated and modular construction has gained greater momentum such as Japan and Sweden and countries where this form of construction is developing, including Canada, Singapore, United Kingdom, United States of America and New Zealand. Consultation with various stakeholders were undertaken in the form of online surveys and written submissions, one-on-one/group interviews and meetings to gain a better understanding of the Australian practice and the challenges that are faced by the industry. The general finding was that regulatory ambiguities for prefab and modular construction cause uncertainties for all involved parties that in turn prevent greater take-up of this form of construction. The quality of the off-site construction products needs to be assured since on-site inspection can be challenging or unable to be fully verified in-situ for complex prefab and modular units. Certification of the factory outputs can be a means to increase the confidence of all practitioners. But even before a project can start, there are barriers in the design rules, approvals processes and financing arrangements, particularly for housing, that can make the use of prefabrication more difficult, if not impossible. These barriers are clearly impeding the productivity benefits that industry and governments understand and expect to flow from the prefabricated building sector. This project finds that there are several initiatives governments can take to assist the industry and these are listed in the Recommendations. Some of the technical recommendations can be addressed via a new section in the National Construction Code (NCC), or a separate protocol or standards published that could be recognised by the NCC, to clarify many ambiguities in the technical construction requirements, when compared to on-site construction methods. The Recommendations outline the regulatory steps that could be taken to address these barriers and support the prefabricated building and construction sector meeting the expectations of the industry, governments and consumers.