NSW government proposes building law reforms to support more prefab homes

The New South Wales government has proposed a raft of new building law reforms aimed at accelerating the adoption of modular and prefabricated homes and streamlining the broader housing approvals process.

Under the Building Productivity Reforms, a single statewide approval pathway for prefabricated buildings would replace individual local council processes, providing what the government describes as a more consistent approach to assessing applications. The reforms would also establish clearer regulations governing the manufacture, supply, transport, delivery and installation of prefabricated buildings.

According to a NSW government communique, the Commonwealth Productivity Commission estimates that prefab and modular buildings could cut construction costs by up to 20 percent and speed up home construction by as much as 50 percent.

Minister for Housing Rose Jackson said the prefabricated and modular housing reforms would remove barriers to such housing without lowering standards for building quality. "These are no longer fringe options - they are central to how we build the homes of tomorrow."

The proposed reforms include measures to expedite building approvals more broadly. The current requirement to submit duplicate detailed designs to gain building approval for apartment buildings would be scrapped. Instead, only one set of detailed designs would be required, which the government estimates could save an average of $327,000 in design costs per apartment block.

Minor design revisions would also be permitted during housing construction without requiring a return to local councils for re-approval.

The proposed reforms also seek to crack down on situations involving conflicts of interest, such as when certifiers have financial or personal stakes in the projects they assess. A clear statutory conflict-of-interest test would be developed to determine when a building certifier must not be involved in assessing a project. Subject to consultation, tougher conflict-of-interest penalties would be imposed, increasing the maximum fine from $33,000 to $1.1 million. Regulators would also be given authority to immediately suspend a certifier's registration when breaches occur.

Minister for Building Anoulack Chanthivong said the reforms would help the state to meet its Housing Accord targets. "At a time when NSW needs to build 377,000 homes by 2029 to meet housing demand, these reforms are critical to delivering the high-quality homes around the state," said Chanthivong.

The Building Productivity Reforms are expected to go before state parliament in 2026.