Nation-Leading Prefab Building Legislation Passes NSW Parliament

New legislation covering prefabricated construction has passed the NSW Parliament, making it the first state to recognise and integrate MMC into a statutory instrument. The Building (Approvals and Practitioners) Bill 2026 , assented on August 4, also incorporates changes to approvals, including the introduction of staged approvals for construction and occupation. Industry has welcomed the bill, along with the passage of another enshrining Decennial Liability Insurance. The bill was delayed in the upper House for six weeks, while amendments were incorporated speeding up the delivery and mechanisms of reforms to disputes processes. In commending the bill to Parliament, building minister Anoulack Chanthivong said it “delivers one of the most significant reforms to the New South Wales building regulatory framework in a generation”. “Central to these reforms is a modernised and efficient approvals framework that reduces duplication, cuts unnecessary administrative burdens and provides a simpler pathway for the approval of new homes,” Chanthivong said. “Approval authorities will be able to exercise discretion in appropriate circumstances to approve variations without unnecessarily delaying construction.” ▲ Shadow building minister Tim James supported the bill and amendments that "“[give] the dispute resolution scheme some teeth”. The bill also grants new powers to Building Commission NSW for dispute resolution, avoiding court proceedings. It bolsters conflict of interest rules for certifiers, while also increasing fines for breaches from $33,000 to $1.1 million. The NSW government has also flagged investment into an industry partnership to develop a MMC factory, with funding to be allocated from a special appropriation pool ring-fenced in the 2026-27 Budget . Meanwhile, 10-year defect protection has been enshrined in law, with the passage of the Fair Trading and Building Legislation Amendment Bill. That bill enables the entry of insurance products that remain with buildings even if builders or developers go bankrupt, while also giving NSW Fair Trading and Building Commission NSW enhanced powers. Industry welcomes new legislation PrefabAUS executive chair Damien Crough welcomed the legislation and said it didn’t create a separate pathway for MMC. “Instead, it provides greater certainty for industry, regulators, certifiers, financiers and consumers by clearly recognising prefabricated building work within the legislation,” Crough said. ▲ The new codification in law provides a simple but rigorous assessment pathway for prefabricated structures. According to Crough, the amendments strengthening dispute resolution provide “a clearer legislative foundation for modern construction methods while maintaining the rigorous building standards that Australians rightly expect”. “The next step is to build a nationally consistent framework that supports investment in Australian manufacturing, strategic procurement, conformity assessment, financing, workforce capability and digital delivery.” PCA NSW executive director Katie Stevenson said that the bill provides a foundation for the 2026-27 Budget commitments. “Clear approvals, certification pathways, local manufacturing capability and smarter procurement settings can help modern construction move from niche to mainstream, improving productivity, creating skilled jobs and accelerating housing delivery,” Stevenson said. UDIA NSW chief executive Stuart Ayres said that the bill was a significant outcome for the land lease sector “and will make NSW a more attractive place to invest capital in these growth-oriented housing types”. ▲ Ayres said the land lease sector would particularly benefit from the changes. “While the land lease sector has been booming in Queensland, approval and certification pathways here in NSW have been stuck in the 1980s,” Ayres said. “This legislation finally brings the sector in line with every other form of residential construction and gives investors and developers the certainty they need to build.”

Construction
Patrick Lau
Fri 07 Aug 26

Nation-Leading Prefab Building Legislation Passes NSW Parliament

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