Prefab: The housing trend turning heads

Prefabricated (or prefab) homes are partially built in factories then moved to your land and built in.
Benefits of prefab construction can include speed, controlled building conditions, less material waste and customisable designs.
CommBank is the first major bank to offer a construction loan for prefabricated houses.

Rob and Jacqui Wootton’s home is nestled into the hillside overlooking Obi Obi valley in the Sunshine Coast hinterland. They bought the property in 2019 with the plan to renovate the existing house on the block but as soon as they started talking to builders, they realised that was unrealistic. “The house is built on a relatively steep slope and in the end, it was cheaper to remove the existing house and start again,” says Rob.

After much research, Rob and Jacqui settled on a prefab home. "The reason we looked into prefab—or modular-style construction—was purely for cost and practical reasons," says Rob.

"The thing that surprised us the most was the flexibility of design we had with the house. We originally thought prefab homes were restricted to poky rooms, low ceilings and simple block-shaped houses made from cheap materials, which couldn’t have been further from the truth."

Prefabricated (prefab) homes are partially built in factories then moved to your land and built in. “The main advantages are cost, speed and efficiency of construction,” says Rob. “Because the houses are built in the one location, that means the labour, raw materials and weather can be controlled to a large extent.”

Rob and Jacqui Wootton built a prefab home in the Sunshine Coast hinterland.

A modern solution to the housing crisis

There’s no question that Australia is in a housing crisis. Demand for homes is outstripping supply and prices are high with new mortgages accounting for about 50 per cent of the median Australian household income¹.

To address the problem, the government set an ambitious target to build 1.2 million homes between mid-2024 and mid-2029, which is 240,000 homes annually².

According to Georgina Harrisson, CEO of Amplify, an independent community-led think tank tackling housing and other big national challenges, "the current lack of supply is driven by a multitude of factors, most notably falling construction sector productivity, insufficient labour supply, historically high costs of construction materials, inefficient land use and planning approval systems and a lack of available land."

But just as the problem is complex so is the solution. "Relying on one-off, site-by-site construction, which is the major feature of traditional building, will not clear the backlog,” says Harrisson. “Modern construction, including prefabricated housing, offers the opportunity to build more homes sooner around the country."

Flexible designs and controlled conditions

Controlled building conditions is just one benefit of this style of construction. "Prefab homes provide speed, quality control and cost certainty," says Billie Higgins, marketing manager at Saltair Modular, the company Rob and Jacqui used to build their property. "Factory-based construction reduces delays and also material waste because any excess due to cutting is then factored into the material needs of the next house being built. The homes can also be delivered to remote areas, offering a solution for communities facing housing pressure."

The ability to customise their build was a big plus for Rob and Jacqui. "We were able to build our house without compromising the design," says Rob. "We have no load-bearing internal walls, giving us complete flexibility. Overall, the house was cheaper than a traditional build."

The ability to customise was a big plus for Rob and Jacqui.

"There’s a whole range of eco-initiatives that we’re plugging into these projects to ensure our families make the healthiest choice for themselves but also for the planet.” - Jamie Durie

Offering sustainable choices

Prefab construction may be helping reshape the building industry with smarter, more sustainable practices. "By building in a factory, there’s less land disturbance and fewer truck movements because we have materials delivered in bulk for multiple homes at once rather than one at a time to a site so there are far fewer deliveries overall," says Higgins. "Many prefab homes also incorporate energy-efficient design, solar options and passive heating/cooling principles."

As host of the television show Growing Home, Jamie Durie has seen some of these innovations firsthand. The series follows three homeowners as they build their dream prefab homes. "There’s a whole range of eco-initiatives that we’re plugging into these projects to ensure our families make healthy choices for themselves and for the planet," says Jamie. "They’re using FSC-certified timbers that are grown in managed forests and using solar passive design principles so they’re getting winter sun but protected from the western sun."

How prefab homes have evolved

Durie believes it’s time Australians started to embrace prefab building methods. "These are not the kit homes of 30 years ago," he says. "Prefab now is a more sophisticated system where the building quality is much higher."

Higgins agrees prefab homes have evolved over the decades. "One of the biggest misconceptions is that prefab homes are low quality or temporary. In reality, modular homes are built to the exact same codes and standards as traditional builds."

Oscar Martin, co-founder of prefab company Dimensions X, believes we’re now at a point where prefab could transform housing. "Not just through efficiency but by recalibrating how we think about living. Smaller, well-designed, sustainable homes are the true answer to our housing crisis."

A prefab design by Dimensions X.

Financing for prefab builds

One of the biggest barriers to entry has been getting finance for prefab builds but that’s changing now, too. "CommBank is the first major bank to offer a construction loan for prefab houses,” says Durie. “It’s the link that mums and dads and first-home buyers might need to get into a house."

Harrisson agrees that initiatives like this make a big difference. "Good projects stall when finance is built for one type of construction and it fails to take in different ways of construction,” she says. “A lot of the value in prefab is created earlier in the design phase and in the factory so loan products need to recognise those milestones."

So is prefab the answer to our housing crisis? Durie thinks so: "If you can build a house in three months, think of the interest and the rent you’ll save,” he says. Rob agrees. "I’m a huge fan of this style of construction. It should be top of anyone’s list when building a new house."

CommBank’s Construction Loan

Here's how financing works with a prefab home loan: first, find a prefab-home manufacturer. Once you have a fixed-price build contract of up to $1.5 million, you can access progress payments of up to 80 per cent of the contract price or 150 percent of the land equity(whichever is lower) before the home is affixed to the land, if you use a CommBank assessed manufacturer³.

If you don't use one, you can access up to 60 percent of the build contract price or 120 per cent of the land value (again, whichever is the lesser of the two)³. Reach out to a CommBank home-lending specialist to find out more.

To find out more about prefab homes and CommBank’s Construction Loan, visit commbank.com.au/prefab-homes

Published: 28 October 2025