Consultation open: National Voluntary Certification Scheme for Manufacturers of Modern Methods of Construction issues paper

The Australian Building Codes Board (ABCB) has released an issues paper for the National Voluntary Certification Scheme for Manufacturers of Modern Methods of Construction.

We are seeking input to inform the development of:

• a National Voluntary Certification Scheme for Manufacturers of Modern Methods of Construction
• nationally consistent definitions for modern methods of construction to be included in the National Construction Code. 

The Commonwealth has tasked the ABCB to facilitate the start of the National Voluntary Certification Scheme for Modern Methods of Construction (the Scheme) in mid-July 2028. This initiative stems from a 2024 agreement between the Australian Government and state and territory governments to reform National Competition Policy over 10 years. The reform is backed by the Government's $900 million National Productivity Fund. This initiative incentivises state and territory governments to implement reforms that benefit Australia's economy, businesses, consumers and support housing delivery.

Current limitations and challenges

A recent Productivity Commission report observed a regulatory burden from building regulations is constraining economic productivity and consequentially inhibiting housing and other building development. It identified that removing regulatory barriers to enable greater use of modern methods of construction has a potentially significant economic impact. 

Conventional building certification processes and inspection regimes currently limit the productivity benefits that prefabricated and modular construction (or modern methods of construction) can deliver. These regimes were developed for traditional construction that is built onsite and while they can serve their purpose well for this type of construction, they present challenges for prefabricated and modular buildings that are manufactured offsite and transported to a building site for installation.

Benefits of prefabricated and modular construction

Productivity Commission analysis reported that prefabricated and modular construction can reduce the cost of homes by up to 20%. Prefabricated and modular homes can be up to 50% times faster to construct than homes built using traditional methods of construction, helping to provide homes more quickly.

Prefabricated and modular construction can also offer improved certainty, safety, quality and environmental sustainability benefits. The construction industry is recognising and responding to the opportunity modern methods of construction presents.

How will the Scheme and consistent definitions help?

The Scheme, together with NCC definitions for modern methods of construction aim to provide a consistent national regulatory approach. These initiatives will provide more certainty and make it easier for manufacturers of prefabricated and modular construction to meet NCC requirements and manufacture buildings. This can help speed up housing delivery and support construction productivity. Modern methods of construction can help address Australia’s housing affordability and supply.

The issues paper provides context on why the Scheme and the consistent NCC definitions need to be developed. The paper contains some background information about modern methods of construction, including the issues, benefits, challenges and current state in Australia and other countries.

The paper sets out the Scheme principles, proposed options and other details that could be included in the Scheme. There are questions throughout the paper, encouraging stakeholders to provide input. 

You can read the issues paper on our Consultation Hub. The consultation will be open for feedback until 29 August 2025 (11:59 pm AEST). 

We encourage stakeholders to read the paper and provide feedback, comments and input.