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Modern methods of construction: a sustainable way to build

Written by Philippa Hillier

 

Australia has been making the change towards modern construction methods by manufacturing and assembling buildings, rooms, or parts offsite and then delivering them to the construction site for installation.

 

 

“Modern methods of construction” are not so modern. In the 1950s and 60s, urgent need for housing and infrastructure following World War II caused a significant increase in prefabricated construction methods. However, during this time the priority was speed rather than quality. Now the industry as evolved and many countries, such as Japan, Sweden, Germany and Singapore, have adopted and improved prefabricated construction, allowing for high quality, innovative and sustainable methods. In Australia, according to Engage Victoria, 5-8% of new homes are prefabricated.

 

 

 

 

What are Modern Methods of Construction?

 

Modern methods of construction (MMC) have multiple names, including prefabrication and modular construction, and encompass multiple approaches.

 

The approaches are:

  • Modular approach: Building 3D buildings or rooms offsite which are then transported to the construction site.
  • Panelised approach: Manufacturing 2D structural elements such as wall or floor panels offsite and assembling them onsite.
  • Kit-of-parts approach: Mixing and matching standardised components in various configurations to construct a building.
  • Hybrid approach: Any combination of modular or panelised approaches with conventional construction.

 

 

 

 

 

 

 

The benefits of MMC

Reduced Construction Time

The current housing shortage places a burden on the construction industry. In 2023, the National Housing Accord was implemented with a plan to build 1.2 million new houses over 5 years. Since the Accord, Australia has fallen far behind on the targeted 240,000 homes per year. MMC builds can be completed up to 50% faster than traditional construction methods allowing for more homes to be built more quickly and efficiently.

 

This time saving is because:

  • Components can be manufactured at the same time as onsite work
  • Workers can work on multiple components and houses at a time
  • Poor weather won’t halt construction.

 

 

Factory Controlled Settings

The benefits of building parts in a factory setting are two-fold:

Safety: Safety: Various studies have found that the prefabricated construction industry is safer than conventional construction work. The factory-controlled setting offers a more predictable work environment with fewer risks, for example it reduces hazards related to falls and workers use the same machinery consistently instead of changing conditions at different building sites.

 

Quality: The controlled environment allows for better monitoring and quality control over the variability of conventional construction. Additionally, weather conditions don’t affect the materials until the transport and installation stage, which reduces the chance of damage.

 

 

Environmental Impact

Construction and demolition waste accounts for a large portion of landfill waste. Modular homes can use less material and generate less waste because factory-controlled production allows for more precise manufacture with fewer errors or defects. Buildings can be designed to use locally manufactured components and less materials. Plus, components can be repurposed at the end of a building’s life which can help support the transition to a circular economy.

 

 

 

 

 

 

 

The challenges of MMC

Accountability

Prefabrication involves multiple locations, lead persons and possibly jurisdictions. Instead of a principal contractor on a building site overseeing all activities, a prefabricated item may be overseen by multiple people in multiple locations at different stages of design, manufacture, transport and installation.

 

Therefore, accountability is split and ambiguous. This could cause issues such as:

  • not knowing who is responsible for defects or damage
  • change in legislation when travelling to a different state might make the component noncompliant or cause activities or inspections to be missed due to a difference in when and how it should be completed in each state
  • unclear liability.

 

 

Regulatory Frameworks

Building regulations were created with conventional, on-site construction in mind. Many aspects of MMC are therefore not regulated thoroughly and current legislation favours traditional construction which creates a barrier for introducing MMC. Additionally, the technology is continuing to evolve and change as the industry grows which makes consistency difficult to achieve.

 

The regulatory frameworks themselves are equally as inconsistent. Each state’s building construction legislation and land use planning systems affect how MMC would be regulated. This causes issues for MMC travelling interstate and risks parts of the process not being regulated effectively and could cause safety or quality concerns.

 

 

Adapting to Change

Any major change in process can cause teething problems in the industry, and MMC is a big change that affects many sectors of the construction industry and is continuously evolving.

 

Potential barriers to this change may include:

  • Stakeholders lacking experience in MMC which can cause improper handling, delays, or safety concerns
  • The necessary specialised equipment needed to transport components not being available
  • The logistics of the transportation process requiring significant coordination and planning
  • The necessity of complying with regulations that still favour traditional construction make it a burden to adapt to MMC and still reach compliance requirements.

 

 

 

 

 

 

 

Australia’s progress with MMC

 

On a national level, the Australian Building Codes Board is developing a National Voluntary Scheme for Manufacturers of Modern Methods of Construction by 2028. The Scheme aims to provide Australia with a consistent national regulatory approach for MMC and support for manufacturers of prefabricated construction to meet compliance requirements. The Australian Building Codes Board is also creating nationally consistent definitions for MMC to include in the National Construction Code.

 

Furthermore, every state has started introducing MMC:

  • Queensland has QBuild’s MMC program which aims to deliver more housing in remote and regional areas, among other things
  • Western Australia’s Modular Build Program has delivered 170 modular homes as of March 2025
  • Tasmania has introduced MMC as part of their goal to deliver 10,000 social homes by 2032
  • Northern Territory has introduced prefabricated homes to remote areas
  • South Australia and ACT have both announced plans to use MMC
  • Victoria has released draft reforms for the Building Act to integrate MMC into legislation, as well as delivering modular housing to regional Victoria
  • New South Wales is also reforming the construction industry through the Building Bill which includes defining and regulating prefabricated building work and has a MMC taskforce to advocate for MMC.

 

 

 

 

 

 

Keeping informed as MMC evolves

 

As modern methods of construction become a staple within the building sector, regulating the industry will no doubt also evolve. You can stay on top of any legislation updates, proposed Bills or draft publications through our online directory SafetyLaw and compliance news service, HSE Bulletin.

 

If you are not subscribed to Environment Essentials but keen to be aware of everything MMC then get in touch or sign up for a free trial.

 

 

 

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