Prefabricated housing, long seen as a niche alternative, is moving into the mainstream in Australia as major lenders and builders embrace factory-based construction.
The Commonwealth Bank of Australia (CBA) has introduced a progressive loan model tailored for prefabricated homes, addressing one of the sector’s biggest hurdles, finance during the off-site build.
Buyers working with an assessed manufacturer can now access up to 80 per cent of the contract price during factory construction, while non-accredited builds still attract up to 60 per cent.
A shift in the market
Prefabricated homes, ranging from modular and panelised builds to kit and flat-pack models, are created in controlled environments before being transported for on-site assembly. The approach allows precision, less waste, and dramatically shorter build times. Some homes can be installed in a single day, with overall build programs completed in 4-12 weeks compared to more than a year for conventional construction.
Modscape founder Jan Gyrn notes that while prefab homes are not necessarily cheaper to produce, “it’s that massive time-saving that’s pushed [the business] to quadruple in a few short years”.
Addressing housing supply
With Australia in the midst of a housing shortage, industry groups expect prefabricated building to triple over the next five years. Commonwealth Bank’s move is seen as pivotal, lowering barriers for families and investors alike.
In Queensland, CBA has also partnered with Oly Homes to fund a new 21,900-square-metre factory on the Sunshine Coast, expected to nearly triple the company’s output from 200 to about 550 homes annually.
Opportunities and considerations
Prefab housing is particularly attractive in regional and remote areas, where shortages of tradespeople and materials often delay builds.
A prefab build can cut out a lot of those headaches by delivering most of the home ready-made. That could mean moving in within three to four months, instead of waiting a year or more for a traditional build.
The model also supports sustainability goals, with many homes incorporating high-performance insulation, double glazing, and sustainable materials, helping to cut heating and cooling costs by hundreds of dollars each year while keeping the home comfortable in every season.
Challenges remain, from logistics in transporting large modules to planning approvals and zoning. Buyers are also advised to review contract terms closely and seek financial advice, especially around builder protections.
What this means for buyers
The new finance structure removes a key barrier, how to pay for the home before it reaches the site. With lenders now offering progress payments earlier, prefab living is becoming a more accessible pathway to home ownership.
For buyers, the drawcard is clear: homes built faster, with consistent quality, and now with funding structures that bring them within closer reach.
Publisher Website: www.homeshelf.com.au