Australia’s offsite builders will now be able to issue a standard building contract tailor-made for prefab, and any builder, manufacturer, or lender is free to use it. That is according to Damien Crough, executive chairman of PrefabAUS, who launched the Standard Form Contract for Class 1 Domestic Construction at Offsite26 in Melbourne last week, delivering a contract the Commonwealth Bank agreed to sponsor 19 months ago.
“For too long, prefabricated construction has been constrained by contracts designed for traditional, site-based delivery,” Crough told a packed conference at the Pullman Melbourne on the Park, with the PrefabAUS chairman blaming contracts that pay a builder stage by stage as a house rises on the block for slowing the take-up of homes that leave a factory in weeks. The new contract gives the industry “the clarity and structure needed to better support how these homes are delivered, helping unlock investment, improve productivity and scale the growth of the modern construction industry in Australia”, he said.
Standard loan contracts only ever described a house going up on the block, Crough explained in early 2025, because “the bank has security over the asset, being the land” and a lender pays a builder’s progress claims as it watches the value added to that land. “So the bank, in the past, has said, ‘Well, it’s in a factory. It’s not on the site. You know, that’s risky,'” he said, with “up to 80 per cent” of a prefab home now built before it goes anywhere near the site.
“To date, however, everything about construction has been created with traditional, on-site work in mind,” Mike Vacy-Lyle said when CommBank joined PrefabAUS as its first bank member on 31 January 2025, with the bank’s group executive for business banking agreeing the same day to sponsor the contract, two months after Crough had put the industry’s case to the Treasurer’s Investor Roundtable.
Standard-form contracts for site-built homes are widely accepted by banks, and nothing like them existed for a factory home, the bank said then, and the Housing Industry Association’s Simon Croft said the following month that HIA’s own transportable homes contract had never had a major bank behind it.
CommBank has backed Modscape since 2017, and Jan Gyrn, its chief executive, said in January 2025 that a robotic line the bank helped fund at Essendon Fields in Melbourne was completing eight modules a day for the 1,008 bound for Cairns, the biggest modular social and affordable housing project in the country.
Since April 2025, the bank has released up to 60 per cent of a prefab contract’s price before the home reaches the block, or 80 per cent with a manufacturer on its accredited list, where a buyer once had to find up to 90 per cent of the cost.
“We’ve already introduced changes to our lending policy to better support prefabricated housing, including enabling progress payments during the offsite construction phase,” Rebecca Markwell said, with CommBank’s general manager of home buying calling the sponsorship “all part of how CommBank is supporting the delivery of more housing supply to the market”. CommBank has agreed to make the contract open source, PrefabAUS told its members in July last year, and the release offers it to every lender “regardless of which lender provides the finance” while naming only the one that paid for it.
A prefab home can be built in as little as eight to 12 weeks, PrefabAUS says, where a house built on site takes 12 to 24 months, and the new contract stages a buyer’s payments to how the home is designed, manufactured, transported, and completed rather than to progress on site. Prefab is still a small share of a market that has to deliver the National Housing Accord’s 1.2 million new homes over the five years from 1 July 2024, and PrefabAUS’s roadmap aims to raise it from 15 per cent of construction to 30 per cent by 2033.
Keystart and OFFSITE share the Perth stage on 16 September
It comes 14 days before OFFSITE executive chairman Norm Roberts takes the case for the factory to the affordable housing panel at WoodSolutions Built Evolution at Crown Perth on Wednesday 16 September, alongside Keystart’s Liam Loan-Lack, the Housing Industry Association’s Michael McGowan, and the Australian Apartment Advocacy’s Sam Reece.
OFFSITE stood 17 two-storey townhouses on one Perth site in 45 days off its three HOMAG Weinmann framing lines at Welshpool, and Keystart is the lender the state backs to fund first-home buyers.
“The question is no longer whether housing construction will industrialise. The question is who is prepared to take advantage of the opportunity first,” Roberts said, with Timber Insight chief executive Craig Oatway, the organiser for the day, moderating the panel after Western Australia’s Housing Minister John Carey opens it.
