NSW Government has announced $4 million in new grants to help boost prefab and modular housing, and applications are now open.
Part of the grant funding is targeted at helping to attract a large-scale manufacturer and standing up a local manufacturing facility to produce prefab, modular and other Modern Method of Construction (MMC) while the rest is aimed at supporting building businesses which are focused on prefab to do things like adapting prefab building and design solutions to be compliant with Australian and NSW building regulations.
As Master Builders NSW Executive Director said, "Modular and other prefab construction has periodically been the flavour of the month for more than a decade without gaining much traction in the building industry. This grant program of nearly $4 million can help turbo-charge the use of MMC constructed housing and bring it into the mainstream alongside measures such as the government’s Budget announcement of $32.3 million to integrate prefab into the planning and building approvals system."
Housing Innovation in Construction Fund and the Housing Innovation Network Grants Program.
Housing Innovation in Construction Fund
The $2 million Housing Innovation in Construction Fund will support commercially established manufacturers to assess and adapt MMC for mid and high‑rise housing in NSW.
Grants of between $20,000 and $150,000 are available to support engineering feasibility studies and compliance assessments, helping businesses assess how their designs and construction and manufacturing solutions can meet local building regulations. Funding is provided on a co‑contribution basis, with applicants required to contribute at least 50 per cent of total project costs.
Housing Innovation Network Grants Program
The Housing Innovation Network Grants Program supports NSW small‑to‑medium enterprises to pilot innovative housing products in partnership with Homes NSW.
Competitive grants of up to $250,000 will support pilot projects that test digital tools, building materials and service innovations in real public housing environments. The NSW Government has committed up to $1.8 million to the program, with funded pilots expected to run for up to 12 months between late 2026 and 2027.
This will be delivered alongside a series of workshops, learning and networking events for the housing and construction sectors to highlight the importance of innovation and upskill the sector.
These programs form part of a growing suite of reforms to unlock the potential of Modern Methods of Construction, including:
- Inviting experienced local and international MMC operators to partner with the NSW Government to build a world-class facility to deliver prefabricated components and modular housing at scale,
- Introducing the nation-leading Building Bill 2026 to NSW Parliament to enshrine a modern regulatory framework for MMC and increase both industry and consumer confidence,
- As well as investing $32.3 million in the NSW 2026-27 Budget to modernise the building approvals system, integrate it into the NSW Planning Portal and pilot AI tools to speed up licence application processing.