Most of the housing debate in Australia comes down to a few familiar levers. Interest rates. Migration. Planning approvals. Tax settings. All of them matter. But there is a number that gets far less airtime, and it may be the most important one of all.
Over the past 30 years, the number of homes Australia completes per hour worked has more than halved.
That figure comes from the Productivity Commission, which found in early 2025 that physical productivity in housing construction has fallen by around 53 per cent since the mid-1990s. Even the more forgiving measure, which adjusts for the fact that homes today are bigger and built to higher standards, has gone backwards by 12 per cent. Over the same period, the wider economy lifted labour productivity by nearly half.
Put simply, it now takes roughly twice the effort, time and money to deliver the same housing output we managed a generation ago.
For builders, none of this is news. You have lived it. Longer programs. More paperwork. More trades to coordinate. More sign-offs. More risk sitting on your shoulders before a slab is even poured. The question worth asking is why, and whether the fixes being discussed actually target the cause.
One of the more interesting answers is coming from Dr Ehsan Noroozinejad, a Western Sydney University researcher who has become one of the louder voices on construction productivity and modern methods of construction. His argument is blunt. We keep treating the symptoms, and we keep ignoring the structure underneath them.
The real problem is that every home is a prototype
Writing for ArchitectureAu in May 2026, Noroozinejad made a point that should land for anyone who has run a residential job. The deeper issue, he argued, is not only the price of materials. It is the fragility and low productivity baked into the way we design, approve, procure and deliver buildings in this country.
His diagnosis is sharp. Too many projects are treated as one-off prototypes. Every build brings a new design, new detailing, a new procurement path, a new risk profile and a new set of delivery challenges. That constant novelty creates uncertainty, and uncertainty creates cost.
Think about what that means on the ground. A custom set of plans. A fresh round of pricing. New trades who have never worked together. Details drawn for the first time and resolved on site, in the rain, under time pressure. Every home effectively reinvented from scratch.
No other manufacturing-heavy industry works this way. We would never accept it in cars, or appliances, or aircraft. Yet in housing, the one-off approach is so normal we barely notice it. Noroozinejad’s point is that this is the hidden tax on every build, and it compounds across an entire industry.
This reframes the productivity conversation in a useful way. The slowdown is not mainly about lazy workers or a lack of effort. Builders are working harder than ever. The drag comes from a system that asks them to solve the same problems over and over, on every single job.
The fix is repeatability, not cheaper buildings
The obvious counter is that standardisation means dull, identical homes. Noroozinejad rejects that framing directly. The future, he argues, is not less architecture. It is smarter architecture.
His prescription centres on what the industry calls modern methods of construction, which is a broad term covering advanced modular building, off-site manufacturing, robotic fabrication, automated assembly and smart, repeatable design. Done properly, he says, these approaches deliver buildings that are more affordable, higher in quality, faster to build and more resilient, while still carrying architectural character and responding to their setting.
The key word is repeatable. Not identical. The idea is to design within intelligent, industrialised systems, so that proven details, components and processes get reused across many homes rather than redrawn every time. The creativity moves upstream, into the system itself, instead of being burned on resolving the same buildability problems on every site.
For builders, that shift carries real implications. It means engaging earlier with manufacturers, engineers and certifiers. It means thinking about transport, assembly, maintenance and long-term performance at the design stage, not after. The builders who understand this, Noroozinejad suggests, will be far better positioned in a volatile market than those still treating each job as a fresh start.
There is an honest tension here worth naming. Off-site and modular methods only pay off at volume and with consistency. A one-off modular home can cost more, not less. The productivity gain comes from doing the same thing repeatedly and well. That is a genuine change in mindset for an industry built around bespoke, site-by-site delivery, and it will not suit every builder or every project.
What does the rest of the world do? It industrialises
If the case for repeatable, factory-based building needs a proof point, it is worth looking offshore, because this is where the international comparison becomes hard to ignore.
China has built an enormous prefabricated and modular construction industry, and it is now exporting that capability at scale. Chinese prefab building exports have climbed from around 1.5 billion US dollars in 2015 to roughly 4.3 billion in 2025, according to figures reported by Chinese state outlet People’s Daily. Major destinations include the United States, Indonesia, Malaysia, Russia and Australia.
Australia is already a customer. In 2023, Chinese goods made up about 70 per cent of this country’s prefabricated imports. In 2024, Australia brought in around 175 million dollars worth of prefabricated buildings from China, based on UN Comtrade data. The trade is real and it is growing.
The speed numbers attached to the best of this work are striking. In October 2024, a 12-storey apartment building with 24 two-bedroom units was assembled in just nine days in the Philippines, a project that conventional methods would have taken 12 to 18 months to deliver. Closer to home, reports have circulated of compact Chinese-made prefab homes landing in Australian backyards for a fraction of a local builder’s quote.
Now hold that against the Australian reality. Prefabrication is used in only around 8 per cent of construction projects here. We are importing the output of industrialised building while barely industrialising our own.
This is not an argument that the answer is simply to buy more homes from overseas. There are real questions around standards, compliance with the National Construction Code, durability in Australian conditions, and what large-scale importing would mean for local builders and manufacturers. But the comparison makes Noroozinejad’s structural point impossible to dismiss. Other countries treat housing as a product to be manufactured at scale. We still largely treat it as a craft to be performed one site at a time. The productivity gap between those two models is exactly the gap the Productivity Commission measured.
Why this matters for builders right now
It would be easy to file this under long-term policy and move on. That would be a mistake, because the direction of travel is already set, and it is heading toward builders whether they engage with it or not.
Governments are actively pushing in this direction. The 2025 to 2026 federal budget committed funding through a National Productivity Fund to reward states that cut barriers to modern construction, and further money has been directed at advanced manufacturing of prefab and modular housing, including work toward a national certification system to streamline approvals. NSW has moved to clarify how modular and prefab homes are approved. The Australian Building Codes Board has published guidance on off-site and modular methods. The regulatory scaffolding is being built right now.
The Commonwealth has previously estimated that modern methods of construction can cut overall costs by up to 20 per cent and build up to 50 per cent faster than traditional homes. Whether those figures hold at scale in Australian conditions is still being tested. But the direction is clear, and the financial incentives are lining up behind it.
For builders, the practical takeaway is not to rush out and buy a factory. It is to start thinking about where repeatability already lives in your business. Standard details you reuse. Floor plans you have refined over years. Trades and suppliers you work with again and again. That is industrialised thinking in miniature, and it is the foundation the bigger shift is built on.
The builders most exposed are those still treating every job as a blank page, absorbing the cost of novelty on each one. The builders best placed are those building systems, refining what works, and getting earlier into design and procurement so problems are solved once rather than repeatedly.
The bottom line
Australia’s housing productivity problem has been measured, confirmed and largely understood. We complete half as many homes per hour as we did in 1995, and the usual policy levers have not shifted that.
Noroozinejad’s contribution is to point at the part we keep overlooking. The slowdown is structural. It comes from an industry that reinvents the home on every job, and a system that rewards bespoke delivery over repeatable, manufactured quality. The rest of the world is industrialising. We are still deciding whether to.
For builders, that is not a threat so much as a signal. The shift toward repeatable, smarter, more industrialised building is coming, backed by funding and regulation. The ones who start thinking that way now will be the ones holding the advantage when it arrives.
More on this topic: Prefab Partnerships: Why Australia is Looking to China to Solve Its Housing Shortfall
Your Questions answered:
How much has construction productivity fallen in Australia? According to the Productivity Commission’s 2025 report, physical productivity in housing construction has fallen by around 53 per cent over the past 30 years. The number of homes completed per hour worked is now roughly half what it was in the mid-1990s.
Why is housing construction productivity so low in Australia? Researchers point to structural causes rather than individual effort. A key argument from Western Sydney University’s Dr Ehsan Noroozinejad is that too many homes are treated as one-off prototypes, with new designs, detailing and processes on every job, which creates uncertainty and drives up cost.
What are modern methods of construction? Modern methods of construction, often shortened to MMC, is a broad term covering off-site and modular building, prefabrication, robotic fabrication, automated assembly and repeatable design. The aim is to manufacture more of a building in controlled factory conditions and assemble it on site.
How much faster and cheaper is modular construction? The Commonwealth Productivity Commission has estimated modern methods of construction can reduce overall costs by up to 20 per cent and build up to 50 per cent faster than traditional homes. Whether those figures hold at scale in Australian conditions is still being tested.
How much prefab housing does Australia import from China? In 2024, Australia imported around 175 million dollars worth of prefabricated buildings from China, based on UN Comtrade data. In 2023, Chinese goods made up roughly 70 per cent of Australia’s prefabricated imports.
What is industrialised construction?
Industrialised construction applies the principles of manufacturing to building homes. Instead of constructing each house from scratch on site, it uses standardised designs, repeatable components and factory production to deliver buildings faster, more consistently and at lower cost. It covers methods such as prefabrication, modular building and off-site manufacturing, where much of the home is made in a controlled factory and assembled on site. The goal is not identical houses. It is reusing proven systems and details across many builds, rather than reinventing them every time.
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