‘More homes, more quickly’: Albo promises prefab homes to answer housing pinch

The Albanese government has invested $54m in prefabricated homes twice as fast to build as brick and mortar in a bid to hit an immense new homes target.

The Albanese government has committed $54m to building prefabricated homes.

Prefabricated homes touted as being twice as fast to build as traditional brick and mortar are the way of the future for the Albanese government, as it races to build 1.2 million new properties by 2029.

Under the National Housing Accord, the Albanese government pledged to build 1.2 million homes by 2029, meaning an average 240,000 homes needed to be built each year.

The most recent data, taking in July 1 to September 30 2024 revealed 44,844 homes had been built as part of the Accord.

The federal government will now spend $54m to support the construction of prefabricated and modular home builds as part of the 2025 federal budget handed down by Treasurer Jim Chalmers on Tuesday evening.

The majority of the money will be given to states and territories to invest in “programs that grow the prefab and modular housing industry”, while an additional $4.7m will be spent on developing a voluntary national certification process for offsite construction that will streamline approvals.

“This is about building more homes, more quickly,” Mr Chalmers said in his budget address.

“It supports our work to cut red tape and reduce financial barriers to more efficient construction methods.”

Industry Minister Ed Husic said manufacturers and homeowners would, for the first time, have a national certification process which would “cut the red tape that has been holding use of these techniques back”.

“Making a house in a factory instead of onsite can cut construction time in half,” he said.

“And they will see Federal and state governments working together to invest in growing our capability to make factory-built quality homes.

“That will help create a steady and predictable pipeline of demand for the industry, boosting investment in the plants and skills we need to grow those capabilities.”

Treasurer Jim Chalmers and Finance Minister Katy Gallagher. Picture: NewsWire / Martin Ollman

The government last year also established the Housing Australia Future Fund (HAFF), to increase the supply of social and affordable housing.

The fund was credited with $10bn in 2024, with an annual minimum disembursment of $500m.

In his budget speech to parliament on Tuesday night, Treasurer Jim Chalmers said the “first two rounds” of the HAFF were “helping build” about 18,000 social and affordable homes.

Mr Chalmers said the government would further lift the cap on Housing Australia’s financial liabilities to $26bn, and would fund crucial associated infrastructure such as roads, water, and power through the Housing Support Program.

SUPPORT FOR FIRST HOMEBUYERS

In a boon to first homebuyers, the Albanese government will also seek to further the Help to Buy scheme under the 2025 budget and if re-elected.

Under the scheme, the government chips in up to 40 per cent in equity for a new home, with space set at 10,000 per year.

As part of the budget, the income cap will increase from $90,000 to $100,000 for single applicants and $120,000 to $160,000 for joint applicants and single parents.

“This will help 40,000 Australians buy their first home in the next four years,” Mr Chalmers said.

“The changes will mean they can access a bigger range of homes and buy one that suits them.

“And we’re easing pressure on the housing market by banning foreign investors from buying established homes, and cracking down on foreign land banking as well.”

FOREIGN BUYERS BAN

In another bid to help Aussies into the housing market, foreign buyers will be banned from purchasing existing dwellings for two years from April 1.

Treasury and the ATO will also receive $5.7m to target “land banking” by foreign buyers to “ensure vacant land in Australia is put to productive use”.

An acute housing shortage that has priced many Australians out of the market has been blamed by the Albanese government for an under-supply in housing.

The government says three main factors have gone into causing the crisis: planning and land release practices, a lack of infrastructure and skilled labour, and a chronic under-investment over years into social and affordable housing.

Housing affordability in Australia has declined for three consecutive quarters. Picture NCA NewsWire / Seb Haggett

As part of Tuesday’s budget, Mr Chalmers said the federal government would establish a housing construction stream as part of the new Key Apprenticeship Program, beginning on July 1, 2025, to try and boost skilled labour.

The program will see $10,000 in financial incentives being delivered to apprentices in housing-related fields, with some employers in priority occupants – many related to housing construction – also potentially eligible for $5000.

“To build more, we need to train more builders,” Mr Chalmers said.

“That’s why we’re attracting more apprentices into the housing industry.”

It comes after the Real Estate Institute of Australia announced on March 7 that housing affordability had reached its lowest point since monitoring began over the December 2024 quarter, the third consecutive quarter of decline.

Mortgage repayments were now, on average, consuming slightly more than 50 per cent of median family income, according to the report, with declines in housing affordability reported last year across of states and territories.

Originally published as ‘More homes, more quickly’: Albo promises prefab homes to answer housing pinch