Is prefab the answer to housing supply challenges?

CBA announced it will become the first bank to join prefabAUS, a body described as “the peak body for Australia’s off-site construction industry, while also introducing policy changes to simplify the home buying journey for prefabricated housing, helping to deliver greater supply.”

Prefabricated homes are those built off-site and shipped and assembled later on. According to group executive, business bank at CBA, Mike Vacy-Lyle, this option could help ease Australia’s housing supply shortages.

“Prefabricated construction is fast, efficient and can play a meaningful role in addressing Australia’s housing shortage. To date however, everything about construction has been created with traditional, on-site work in mind, and we need to rapidly reimagine how we support this industry to unlock scale and deliver more quality and sustainable homes to market sooner,” Vacy-Lyle said.

“We’re proudly joining prefabAUS to work closely with and support local manufacturers. Overseas in countries like Sweden, 80 per cent of houses are being factory built, and we would expect to see Australia’s prefabricated construction sector expand rapidly.”

Prefab homes have a variety of advantages and disadvantages that will depend upon the borrower’s wants and needs. While many may be uninterested in the idea, for some, it can be a quick and affordable way to source a home.

“While prefabricated homes are a great housing option for many Australians, they have been historically challenging to finance, with customers needing to cover much of the upfront costs,” said Michael Baumann, executive general manager, home buying at CBA.

“We want to alleviate some of the financial barriers associated with prefabricated properties. We believe these upcoming changes will help to achieve just that, giving more Australians the chance to look at this way of building a home, which could, in turn, help deliver more supply to market faster.”

The new partnership between the major and prefabAUS is in the hopes of shedding some light on the industry and helping overcome barriers.

“With support from CBA, prefabAUS will tackle some of the challenges facing our members and their clients. We are excited to unlock the potential of off-site construction to address one of the nation’s most critical challenges – providing access to high-quality housing at pace,” said Damien Crough, founding director of prefabAUS.

“Utilising prefabrication, a house constructed in a controlled factory environment is built in 10 to 12 weeks, compared to around 18-plus months through conventional building.”

Jack Campbell is the editor of Broker Daily. After graduating from the University of Wollongong in 2022, Jack began his journalistic career working on Broker Daily’s sister brand, HR Leader. In August 2023 he was made the news editor and worked alongside some talented journalists writing articles and recording podcasts.

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