The Minns Labor Government has passed nation-leading building reforms through NSW Parliament introducing a new, modern era of approvals and construction methods.
The laws make it faster, easier and cheaper to build high-quality homes by supporting the uptake of Modern Methods of Construction (MMC) and streamlining project approvals to get more homes out of the ground as quickly as possible.
These reforms come as the Minns Labor Government is set to turbocharge the way homes are built in NSW, unlocking the potential of MMC and lifting productivity in the building sector. The Government has invested $32.3 million in the NSW 2026/27 Budget to implement these laws, including modernising the building approvals system, integrating it into the NSW Planning Portal and piloting AI tools to speed up licence application processing.
Constructing a new approach to MMC
The adoption of MMC, including modular and prefabricated housing, is key to boosting housing supply in NSW. MMC has the potential to reduce overall building costs by up to 20 per cent and result in homes being built up to 50 per cent faster.
Despite these benefits, MMC has historically relied on approvals that are slow and inconsistent.
This legislation decisively changes that. NSW is now the leading Australian jurisdiction to provide a clear regulatory framework that:
- Recognises MMC in law by defining "prefabricated buildings",
- Integrates prefabricated buildings into the building approvals system,
- Sets clear rules for the manufacture, supply, transport, delivery and installation of prefabricated buildings.
Together, these changes will increase industry certainty, boost consumer confidence, and encourage more builders to take advantage of innovative MMC.
Laying the foundations for streamlined building approvals
The Bill will also streamline complex, fragmented and often duplicative approvals processes into one single piece of legislation.
This includes:
- Removing duplication between building and planning legislation,
- Simplifying building and completion approvals,
- Establishing a system of staged approvals to allow construction to begin and for people to move in as early as possible,
- Allowing minor variations to a building's approval - like changing the size of a door or installing a tap outside - to be approved without the need for a new planning consent if it fits the approval framework,
- Operating in an easy-to-use digital environment,
- Creating a single authoritative source of truth for consumers, regulators, and industry, making the approvals process easier for everyone who needs to access it.
These changes will save the building industry valuable time and reduce costs. Requiring just one set of designs for apartment buildings to gain building approval is expected to save an average of $327,000 in design costs per apartment block alone.
The Bill also establishes a new framework for dispute resolution by Building Commission NSW to minimise the need for costly court proceedings, as well as impose stronger integrity measures for certifiers by increasing fines from $33,000 to $1.1 million for those who breach bolstered conflict of interest rules.
These changes form part of a growing suite of reforms to unlock the potential of MMC, 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,
- Opening applications for the Housing Innovation in Construction Fund and Housing Innovation Network Grants Program - a nearly $4 million investment to strengthen the local industry MMC sector.
This is all part of the Minns Labor Government's plan to build a better NSW with more high-quality homes and services, so young people, families and key local workers have somewhere to live and in the communities they choose.
Minister for Planning and Public Spaces Paul Scully said:
"There has never been a more important time to find modern solutions to the state's housing supply challenges.
"These laws build on last year's landmark planning reforms to make the process from planning to building and moving into a new home as smooth and simple as possible.
"We've made common sense changes to drive better outcomes for the people of NSW. Overhauling another fragmented, duplicative system with one clear set of rules targeted at building more quality homes faster in every corner of the state."
Minister for Housing Rose Jackson said:
"Today's housing challenges require modern solutions - and that's exactly what these reforms are enabling.
"Prefabricated and modular homes are no longer fringe options. They are central to our housing solutions, and the Minns Labor Government is proud to be leading the nation in our adoption.
"This marks a new era of innovative, high-quality homes in NSW."
Minister for Building Anoulack Chanthivong said:
"We know that productivity in the building industry has not kept pace with the need to build more, quality housing across our state.
"So the Minns Labor Government is removing red tape to boost housing completions and support innovative ways to build safe, high-quality homes.
"We've listened to the building industry and progressed reforms that will deliver the certainty and modernisation they need.
"We're building more quality homes faster and cheaper without compromising on quality."
NSW Building Commissioner James Sherrard said:
"These reforms support Building Commission NSW's role as NSW's building regulator by making it easier for people to understand and comply with building requirements.
"Not only will these laws encourage the nation-leading adoption of MMC, but they also give industry and consumers alike more confidence in every stage of the building process - from approvals to construction to certification."
Executive Director of Master Builders NSW Matt Pollock said:
"The passage of this Bill will deliver a streamlined approvals processes that will cut costs, reduce delays and enhance the viability of new housing projects so the industry can get on with constructing more new homes.
"Providing a framework that brings MMC into the mainstream and provides confidence means there will be more opportunities for builders to construct more new homes faster in a controlled environment.
"We thank the Minns Government for its collaborative approach and congratulate it on passing these reforms that will underpin increased building activity and economic growth."
UDIA NSW CEO Stuart Ayres said:
"UDIA welcomes the passage of this important building Bill which removes the duplicate regulations that have been holding back manufactured homes in land lease communities across NSW.
"This practical reform will put NSW on the front foot with streamlined approvals, a reduction in unnecessary costs and support faster delivery of this emerging type of housing."
Executive Chairman of prefabAUS Damien Crough said:
"This is a significant step forward for New South Wales and one that recognises how buildings are increasingly being manufactured as well as constructed.
"Good regulation should enable innovation, not create uncertainty. This amendment provides a clearer legislative foundation for modern construction methods while maintaining the rigorous building standards that Australians rightly expect."
