Australian governments have set a target to deliver 1.2 million new homes by mid-2029, yet approvals and completions remain well below target. National Cabinet’s Planning Reform Blueprint recognises that faster, clearer planning rules are indispensable to close the gap, especially for “non-traditional” construction methods such as modular and prefabricated housing.

The Commonwealth has now injected $54 million to supercharge modular production and develop a national off-site certification process, signalling serious intent to industrialise homebuilding. NSW, Victoria and other states are already trialling factory-built social housing to shave months off build times. A new handbook from the Australian Building Codes Board (ABCB) on prefabricated, modular and offsite construction also gives the industry a clear compliance pathway with the National Construction Code.

However, despite these positive signals, domestic efforts alone will struggle to achieve the scale and cost efficiencies that modular housing promises. Australia’s construction supply chains span multiple countries, with many of the most advanced techniques originating overseas.

To overcome these limitations, Australia is well placed to convene an “Asia-Pacific Housing Affordability Alliance”. This alliance would unite willing partners, such as Japan, Singapore, Canada, New Zealand, the United Kingdom and ASEAN member states in a coordinated program of trade facilitation, standards alignment, pooled procurement, shared design resources and portable workforce credentials.

By leveraging existing trade agreements and regional forums, the alliance can deliver faster, more affordable homes and strengthen Australia’s reputation as an innovation leader. We set out six practical, sequenced policy steps to establish this housing alliance.

Figure 1: Proposed steps for an Asia-Pacific Housing Alliance

Step one: tariff-free access to building inputs

Under Australia’s free trade agreements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the ASEAN–Australia–New Zealand Free Trade Area (AANZFTA), most building materials already enter Australia without duties. However, certain components, such as volumetric housing modules and automated factory machinery, are spread across different tariff classifications, which can create delays and additional compliance work for importers.

To eliminate this uncertainty, the Australian Government could negotiate a “Modular Construction Annex” to its existing trade pacts. This would explicitly define prefabricated housing kits, engineered timber panels and factory equipment as duty-free, simplifying the rules of origin so that any module assembled in a member country automatically qualifies for tariff relief. Extending this to trade partners via an upgrade to the CPTPPP and AANZFTA would reinforce regional cooperation and cost savings without requiring new treaties or significant budgetary outlays. Regular reviews of these plurilateral agreements would be the best forum to push for upgrades.

Step two: pilot mutual recognition of component standards

While tariffs matter, the biggest barrier to cross-border modular supply is the patchwork of building codes and certification processes. Having to re-test or re-approve the same prefabricated panel or bathroom pod in each country adds both time and expense. ASEAN has set a useful precedent: in 2024, the ten member economies agreed to accept each other’s accredited test reports for a range of construction materials.

Drawing on that model, Australia and a willing partner such as Singapore could pilot a “Mutual Recognition Agreement” (MRA) for three high-volume components: cross-laminated timber wall panels, prefabricated bathroom pods and modular steel frames. Under this arrangement, once a panel or pod passes one country’s rigorous tests, regulators elsewhere would fast-track its approval, reducing duplicated inspections. Once the pilot demonstrates tangible savings, other CPTPP and ASEAN members could be invited to join, creating a broader network of trust in factory-made housing technology.

Step three: aggregate demand through a shared procurement platform

Modular housing manufacturers need large, predictable orders to justify investments in automation and advanced factories. In the UK, the Pan-London Accommodation Collaborative Enterprise (PLACE) saw 18 boroughs combine their housing needs in a single procurement process, securing bulk pricing and reliable delivery of temporary homes. Inspired by this local-level success, Australia’s new national housing agency, Housing Australia, could establish a “Modular Procurement Hub” to apply this strategy at the international level.

State housing authorities and federal agencies would signal their five-year pipelines to the Hub, which could then bundle these requirements with orders from international alliance partners. By issuing framework contracts to pre-qualified suppliers, the Hub would allow manufacturers to offer competitive pricing on large volumes of units, from one-bedroom apartments to multi-storey walk-ups. Suppliers would bid once but deliver to multiple markets, ensuring economies of scale and spreading investment risk across jurisdictions.

Step four: publish and share pre-approved design templates

Lengthy design and approval cycles remain a major time sink for housing developers. Canada’s new Housing Design Catalogue demonstrates a way forward. The Canadian federal government has funded a suite of 50 low-rise and modular prototype plans that local governments can adopt with minimal additional review. NSW has already delivered a Housing Pattern Book competition and a series of designs. Drawing on that experience, the alliance could create an “Asia-Pacific Modular Pattern Book”, beginning with an Australian edition.

This digital library would feature a range of layouts that meet the National Construction Code’s structural, fire and energy requirements: studios, two-bedroom units, townhouses and mid-rise apartments. Local councils would commit to granting planning and building approvals within ten working days for any project that uses these pre-certified designs. Alliance partners would then adapt their own pattern books and contribute to a shared repository, allowing a design proven in Melbourne to be tweaked for climatic conditions in Osaka or Vancouver without restarting the entire approval process.

Step five: build a portable workforce through a skills passport

Automated factories and rapid on-site assembly still depend on skilled labour. Australia’s existing Automatic Mutual Recognition Scheme allows licensed tradespeople, such as electricians and plumbers, to work across states with a single registration.

The “white card” safety induction is accepted nationwide, but to extend this mobility internationally, the alliance could develop a Modular Construction Skills Passport. Using the APEC International Professional Engineer Register as a template, the passport would define competency standards for roles critical to modular housing: assembly technicians, factory operators, digital designers and on-site installers. Training institutions in member countries, such as TAFE in Australia and Polytechnics in Singapore, could collaborate on accredited micro-credential courses. Graduates of these programs would receive a portable credential recognised by alliance regulators and, where needed, fast-track work visas to fill project roles across borders. This approach addresses both local skills shortages and regional labour mobility.

Step six: demonstrate success with a “FastBuild 10,000” pledge

To convert policy into practice, each alliance member could commit to constructing 10,000 modular affordable homes by 2028 using the policy tools outlined above. In Australia, targets could be divided among three flagship sites: 3,000 units in a Sydney transport-oriented precinct, 4,000 units in a regional centre such as Ballarat or Townsville, and 3,000 units in remote or Indigenous communities. These pilots would use tariff-free imports of key components, MRA-certified elements, pattern-book designs, pooled procurement contracts and passport-ready labour.

The national housing agency would publish annual reports on build costs, delivery speed and energy performance, while the Department of Foreign Affairs and Trade (DFAT) would share findings with alliance partners. These transparent, high-profile projects would demonstrate the viability of cross-border modular collaboration and build momentum for the rollout of these policy steps across the alliance.

A time for housing allies

Australia already sits at the intersection of three powerful trends: an acute housing shortage, a growing policy appetite for modular building methods and a web of free-trade agreements and standards partnerships in our region.

Modular and prefabricated homes can be constructed up to 50 per cent faster than traditional buildings. Bulk procurement and larger factory runs can cut per-unit costs by at least 15 per cent, translating into savings of $30,000 to 45,000 for a typical social housing duplex. Factories equipped with advanced machinery and zero-tariff machinery imports can boost regional manufacturing jobs and reduce dependence on volatile single-source suppliers. Finally, the precision factory assembly of timber and hybrid construction systems can help member countries meet their Net Zero emissions commitments by slashing waste and lowering the carbon embedded in each home.

None of these steps require new treaties or costly new bureaucratic agencies or processes. They piggyback on existing institutions and agreements while tapping modest but well-targeted Australian government funding streams already in place. While we recommend all six steps be implemented as part of a comprehensive regional housing alliance, they could also be adopted individually or in a different order as geopolitical and economic forces permit.

With housing affordability biting voters and governments across the region, an Asia-Pacific Modular Housing Affordability Alliance is politically feasible, economically rational and technically ready. It could also serve as an important demonstration that countries can generate clear social and economic benefits through international cooperation at a time when the global free trade architecture is under stress.

What is needed now is a first mover. Australia – armed with a national blueprint, existing funding commitments, a reform-hungry construction sector and a strong pedigree of leading regional free trade negotiations – has every reason to seize that role and invite its neighbours to build a more efficient, greener and cheaper housing future together.

Dr Ehsan Noroozinejad Farsangi is a Senior Researcher at the Urban Transformations Research Centre, Western Sydney University, where he specialises in Smart, Resilient & Affordable Housing. He is also the Global Challenge Lead at WSU on Sustainable Futures. He has also received a Policy Challenge Grant from the Australian Public Policy Institute on affordable and Net Zero housing.

Professor Greg Morrison is the Lang Walker Endowed Chair in Urban Transformation and the Co-Director of the Urban Transformations Research Centre at Western Sydney University. Greg is a leader in environment and environmental engineering who has made demonstrable impact in circular economy, Net Zero, living labs and climate adaptation and innovation.

Barrie Harrop is an Australian placemaker and entrepreneur with over 40 years’ experience in large-scale premium housing and building developments nationwide. He serves as the Executive Chairman of Thrive Construct, a company dedicated to innovative, sustainable and affordable housing solutions.

This research is supported by a Policy Challenge Grant awarded by the Australian Public Policy Institute.

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