Prefabricated homes in NSW will have a single pathway for building approval as part of proposed reforms which aim to facilitate greater productivity in the state’s construction sector.

And duplicate designs will no longer be required for apartment building approvals.

The NSW Government has proposed changes to planning and construction laws which it says will improve productivity and deliver higher quality buildings.

A key part of the reforms involves changes to facilitate greater adoption of prefabricated buildings.

In this area, the proposed reforms will:

• create a statewide approach which will provide a single pathway for prefabricated building approval.
• set clear rules for the manufacture, supply, transport, delivery and installation of prefabricated buildings.

According to the government, benefits of these reforms will be substantial.

Citing Commonwealth Productivity Commission estimates, it says that modular and prefabricated building can be up to 20 percent cheaper and 50 percent faster to construct compared with traditional homes.

As things stand, however, approvals for the installation of prefabricated homes rest with local councils – a situation which the government says has led to a slow and inconsistent approach to their regulation.

In turn, this has restricted the availability of construction loans, limited consumer protections which are available, and impacted consumer confidence in these types of homes.

Instead, the government says that the proposed reforms will position NSW as the first Australian jurisdiction to integrate prefabricated homes into the building approval system.

The reforms will also align the regulation with traditional building work and require compliance with the Building Code of Australia.

Other proposed reforms will:

• Remove the current requirement to submit duplicate designs in order to gain planning and building approval for apartment buildings. Instead, developers will need only to submit a single set of designs. This is a measure which the government says will save an average of $327,000 per apartment block in design fees.
• Allow minor variations to be made during construction without needing to send the project back to local councils for re-approval.
• Strengthen conflict of interest laws for building certifiers by introducing a clearer statutory conflict of interest test for certifiers to clarify when a conflict arises and when a certifier cannot be involved in the development.
• Increase maximum court-imposed penalties from $33,000 to $1.1m for certifiers who breach conflict of interest requirements, while giving the regulator the power to immediately suspend a certifier’s registration when breaches are found.
• Establish a clear chain of responsibility so that certifiers are not incorrectly held accountable across the whole building approvals process.

Legislation to enact the reforms will be introduced in 2026.

NSW Building Commissioner James Sherrard welcomed the reforms.

“These reforms will ensure all types of homes, whether they are built using traditional methods or modern methods of construction, are compliant with the Building Code of Australia,” he said.

“The Building Productivity Reforms are the next step in the state’s journey to modernise and simplify legislation that governs the way homes are approved and built in NSW.”

Building industry lobby groups welcomed the reforms.

“Manufactured homes and Land Lease communities must play an increasingly important role in tacking the housing crisis,” UDIA NSW CEO Stuart Ayres said.

“These proposed reforms will make NSW a more attractive place to invest capital in these growth-oriented housing types.”

Matthew Pollock, Executive Director of Master Builders NSW, agrees.

“These are nation-leading reforms bringing prefabricated construction into the approval system and by doing so giving home builders and buyers an accelerated build time,” Pollock said.

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