Australia’s push to use more modular and prefabricated systems to address its housing crisis has strong government backing but still faces major obstacles — namely, affordability and scalability — that is, according to Mathew Aitchison, CEO of the Commonwealth-supported Building 4.0 CRC, who addressed the Perth Property Congress yesterday.
Aitchison said modern methods of construction, or MMC, hold “huge potential to boost productivity and lower costs,” but warned that overseas models cannot be imported without local adaptation. “I’m going to give a slightly cautious answer to what was a very enthusiastic question,” he said. “Firstly, I don’t think there is a single answer around the world. Secondly, I think we’ve got an immense amount to learn from all of these other countries. I think we also have to be very cautious about the way we apply those lessons in Australia.”
Citing Sweden, Japan, and the United States as examples, Aitchison said Australia cannot afford to import an overseas building model and expect success. “We don’t have those capabilities in Australia in that form. So, we can learn a lot from them, but we have to be very measured in how we apply them. All I’m saying is to the very many people that I meet who say, Let’s just do what Sweden is doing. Pump the brakes a little bit on that.”
His remarks come as affordability pressures intensify across Australia’s housing markets, with new data showing a record number of suburbs where median house and unit values exceed $1 million, a trend that highlights the widening gap between property prices and household incomes and strengthens the case for cost-effective construction approaches.
Despite growing momentum behind MMC, Aitchison said cost remains a major constraint. “I think we need to focus more on construction costs. I think we need to focus more on getting productivity up,” he said. “Today, I heard one of our colleagues on stage… talking about how it’s currently more expensive to use modular. That has been our experience around the country.”
He said modular solutions can be economically sensible in remote and regional locations, where logistics and access make traditional construction problematic, but that urban deployment will be difficult until local manufacturing scales up to achieve critical mass. “We need the post and plate to get up and running and become a mass system where we can leverage the full power of manufacturing,” he said.
Aitchison pointed to another of the current initiatives as evidence of the sector’s potential, citing Building 4.0 CRC’s collaboration with Cedar Pacific and the company’s work with Sumitomo Forestry to deploy mass timber systems in Australian build‑to‑rent projects. “I’m very optimistic, very bullish about our opportunity to innovate in this country. So I’m exceptionally buoyant and optimistic about what we can achieve,” he said.
Aitchison’s address comes days after Julie Collins, Australia’s Minister for Agriculture, Fisheries and Forestry, revealed that a new advanced manufacturing precinct strategy, which once finalised, will allow it to accelerate prefabricated timber housing at scale, with the new project one of 14 funded under the latest round of the Australian Forest and Wood Innovations (AFWI) program.
Minister Collins said the projects “range from developing a national biosecurity program for giant pine scale, to an indigenous led cultural timber recovery project in the Northern Rivers, through to an advanced manufacturing precinct strategy to accelerate prefabricated timber housing.”
“Together (the new projects) represent an investment of $30 million, with more than $10 million from AFWI and over $20 million contributed by industry and partners,” Minister Collins said. “Collectively, this research is strengthening Australia’s forestry future – growing the next generation of researchers whilst delivering innovative solutions to boost productivity, sustainability, and climate resilience across the sector.”
Established last year, AFWI is a $100m research program co‑matched by industry partners and is a key pillar in the Albanese government’s strategy to grow the nation’s forest and wood sector. The program works with more than 20 research partners, including the University of Tasmania, the University of Melbourne, and the University of the Sunshine Coast, on projects spanning house frames, agricultural structures, furniture, and packaging. “From house frames, to farm gates, to furniture in homes and offices, to the cardboard products we use every day, it’s clear that the forestry sector is at the heart of everything that we do,” the minister said.
- To learn more about Australia’s golden decade for forest-based research, and why the next 10 years will be crucial in transforming Australia’s timber and forest based industries, click here for Wood Central’s special feature from yesterday.
