Australia’s timber processors and engineered wood value chain could be the supply-side catalyst for a national plan to manufacture the country’s housing in factories, with prefabricated wooden building lines already 21.5 per cent more productive per worker than traditional site building. That is according to Lachlan Kerwood-McCall and Nick Dyrenfurth, the John Curtin Research Centre’s chief economist and executive director, whose Manufacturing Homes report went public at the Australian Labor Party’s National Conference on Saturday.
Funded by the Timber, Furnishing and Textiles Union and consultancy IndustryEdge, with technical support from Australian Forest and Wood Innovations, the report is an industrial policy for wood as much as a housing plan. Its central proposition is that the timber-framing system already used in most Australian houses can be scaled into a supply-side engine for a manufactured housing industry.
“Traditional on-site construction simply can’t cope with the scale of the housing supply crisis,” Kerwood-McCall told SBS World News over the weekend, with the launch also carried nationally by ABC News as Housing Minister Clare O’Neil fronted the Saturday morning session.
“A manufactured crisis requires manufactured solutions,” the report states, with factory-built housing covering 5 to 8 per cent of Australian building work. Sweden builds 84 per cent of its detached homes offsite, Japan manages 15 per cent, and Singapore now runs 68 per cent of new development through design for manufacture and assembly.
Australian builders have gone backwards over the same decades, with housing construction productivity down 53 per cent since 1994-95, while economy-wide labour productivity rose 49 per cent, and a detached home now takes 10.4 months to build, up from 6.4 months in 2015.
“Low capability, high need” was the prefabAUS Industry Roadmap’s 2023 verdict on most of the value chain, and the report applies the same judgment to a sector that still uses off-site methods on-site.
“With tolerances to a fraction of a degree and millimetre,” Modscape Chief Executive Jan Gyrn has described the walls, floors, and roof cassettes built by the Randek ZeroLabor robots at the company’s A$35 million Essendon Fields plant. The report counts Modscape and Fleetwood Australia among manufacturers already delivering finished buildings up to 50 per cent faster than site builds.
Government purchasing is the first lever in the plan, with Australian-manufactured content rules across the audited public procurement pools modelled to return $6.1 billion over the ten financial years to June 2036, enough to buy almost 15,000 additional public dwellings within the same budgets.
Round 3 of the Housing Australia Future Fund is the first test, with 17,080 of its 21,350 dwellings to be built through manufactured housing under the headline recommendation, and only 889 homes completed from Round 1 when the report went to print.
“Maximise the use of off-site, prefabrication and other modern methods of construction,” the Albert Park Pit Building brief instructs, a Victorian contract carrying 93 per cent local content and 95 per cent local steel, and one already supplied with glue-laminated timber by Australian Sustainable Hardwoods at Heyfield.
Workforce and skills form the fourth of the plan’s five pillars, where the green collar jobs peaked at 58,355 direct full-time equivalent positions and reached 84,615 once the supply chain is added. Two-fifths of that activity falls in the regions and outer suburbs, delivered through 117,869 training commencements across the decade.
Most of those commencements flow through existing trades strengthened with digital systems, quality assurance, and off-site installation skills, with no diluted super trade qualification required, the authors argue.
Carbon accounts for the second half of the case, with modular mass timber research finding construction 20 to 30 per cent faster and climate impact 26.5 per cent lower. Infrastructure Australia estimates that embodied carbon from building work accounted for 10 per cent of national emissions in 2023, with 23 per cent of upfront emissions abatable now.
“An exporter of unprocessed raw materials for offshore value-adding,” the Australian Industrial Transformation Institute found in the deindustrialisation years, a diagnosis the report applies directly to wood. Australia imported $326.4 million of prefabricated buildings in the year to November 2025, and a further $342.9 million of engineered wood products over the year to December 2025.
Import substitution under the central policy path is valued at $4.28 billion across the modelled decade, a measure of onshored activity rather than a budget saving. The report puts the domestic market at $13 billion to $18 billion today, growing to $30 billion by 2033.
Kerwood-McCall and Dyrenfurth are now asking the Commonwealth to adopt Australian Forest and Wood Innovations’ National Demonstration of Australian Manufactured Timber Housing as the first project under a staged roadmap, 600 manufactured timber dwellings across six to ten sites within six months. Financing would come through a Clean Energy Finance Corporation facility of up to $300 million that recycles capital from dwelling sales.
It comes as The Precinct released its completed Portland feasibility study on Thursday, finding that a $200 million hardwood plant could halve Australia’s glulam imports, and naming Portland in Victoria and Orange in New South Wales as the Phase 2 regional manufacturing hubs for National Reconstruction Fund co-investment.
Unlocking the domestic supply chain to make higher-value products for the housing and construction industry is the task set for Recommendation 12, which asks the Government to steer a substantial share of the $300 million Forestry Growth Fund towards prefabrication. A unified national policy on engineered wood products is the second ask. Capacity remains the binding constraint on the authors’ own numbers, with domestic factories still 2,914 dwellings short of Australian manufactured housing demand in the 12 months to June 2037.
