The Albanese government has committed $39.3 million to a trial of System 600, an open-source prefabricated housing platform that standardises components such as wall panels, bathroom pods and facades, enabling them to be manufactured off-site and assembled on-site at speed. It comes as Housing Minister Clare O’Neil pushes modern methods of construction to the centre of the Commonwealth’s housing agenda, drawing on a Swedish model where prefabrication is already standard.
O’Neil used her National Press Club address to argue Australia has been too slow to adopt techniques common overseas, telling delegates she is a committed believer in housing innovation. The funding will flow to states and territories for pilot projects, technical development, training and supply-chain expansion.
“We have to get faster and more efficient,” O’Neil said.
The minister pointed to Scandinavia, telling the Press Club that 80 per cent of homes built in Sweden use some aspect of modern methods of construction, “compared to just 5 per cent in Australia.” She said she would happily live in a home built that way, pushing back on what she cast as lingering Australian scepticism toward prefabrication.
“We do need to change that,” O’Neil said of the gap.
System 600 was developed jointly by Homes NSW and the Building 4.0 Cooperative Research Centre, and its open-source design lets different manufacturers produce compatible parts under common standards rather than locking projects into a single proprietary supplier. The platform breaks a building into repeatable subsystems covering structure, external envelope, services and interior finishes, applying manufacturing logic to construction while preserving design flexibility.
“We have standard parts, not standard designs,” Building 4.0 CRC Director Mathew Aitchison said.
The program starts with medium-density buildings of four to six storeys, using a standardised kit of parts manufactured off-site — bathrooms, kitchens and balconies among them — that is then assembled on-site through systems built to meet tenant needs, speed delivery and drive down cost. The system takes its name from a 600 by 600 millimetre grid that coordinates component size and connection, with roughly 80 per cent of each building standardised and the remaining 20 per cent tailored to its site.
Homes NSW and the CRC put the approach on show last year with a fully built two-bedroom demonstration apartment at a Mascot showcase that drew more than 1,000 attendees across its run. Because the platform is open-source and supplier-agnostic, any manufacturer that builds to the shared rules can supply parts to any project, with the first deployment running through the Homes NSW social-housing program.
That program has been underway since May 2024, with $2 million each from Homes NSW and the CRC, targets a 20 per cent cut in construction time and cost, and underpins a NSW commitment of $6.6 billion toward 8,400 new homes and 30,000 repairs. Professor Daryl Patterson, who leads the platform’s technical development, said the distributed model was a deliberate answer to the risks of highly centralised modular manufacturing.
“There’s a lot of intelligence in the supply chain,” Patterson said.
The timing matters because productivity is moving in the wrong direction, with Productivity Commission findings showing that Australia builds roughly half as many homes per hour worked as it did in 1995, and residential construction timelines nearly doubled over the past decade. New dwelling prices rose an average of 4.7 per cent in the year to April on Bureau of Statistics figures released on Wednesday, and the Commonwealth Bank expects home-building costs to peak at 8 per cent by September.
National Shelter chief executive Jackson Hills said the funding would help clear one of the most stubborn barriers to the delivery of modern construction methods at scale. The government also wants more social housing built from prefabricated parts, and O’Neil told the Press Club the $40 million kit-of-parts investment could not be better spent, given the wear and tear on ageing public housing stock.
“There is simply no pathway to meeting our future housing needs without the adoption of new and innovative housing,” Hills said.
Timber is among the materials the platform can draw on, with the Building 4.0 CRC naming timber cassettes, cross-laminated timber and pre-nailed timber frames among the panelised parts a kit-of-parts building uses, after industry findings that mid-rise has overtaken detached housing as the typology driving Australia’s housing growth.
This is the precise problem the Future Framing Initiative is testing, with University of Tasmania research lead Professor Louise Wallis confirming the team is identifying where the roadblocks sit and building the evidence to clear them. The work tests the framing system responsible for more than 80 per cent of the country’s current housing stock against a mid-rise future.
“Literally it’s up to 15 metres,” Wallis said of the system’s tested upper bound — roughly four to five storeys.
The Initiative is backed by FWPA alongside major timber framing suppliers, including Timberlink, and is working to build trust in timber and strengthen its role in affordable, efficient housing. Australian Timber Development Association chief executive Andrew Dunn has said the Initiative will publish its mid-rise lightweight-framing standard as an FWPA Industry Standard rather than route it through Standards Australia, a means to deliver outcomes to the market in the shortest possible time.
“This is a generational opportunity to fix roadblocks and modernise timber framing,” Dunn said.
