Steel Frames
Australia has a housing target that everyone agrees on and a build rate that is nowhere near meeting it. The National Housing Accord commits the country to delivering 1.2 million new, well located homes between 1 July 2024 and 30 June 2029. That works out to 240,000 homes a year, or roughly 60,000 a quarter. The question that keeps surfacing in industry forums, Productivity Commission reports and government briefings is a simple one: can we physically build at that pace, using the methods we are currently using?
The short answer, backed by data from the Australian Bureau of Statistics, Master Builders Australia, the Housing Industry Association, Infrastructure Australia and the Productivity Commission, is no, not without changing how we build. This blog pulls the current numbers together, explains why traditional stick framing cannot scale fast enough on its own, and looks at the alternative construction methods, including prefabricated light gauge steel framing, that can start to close the gap.
The Accord target of 1.2 million homes assumes a steady run rate. Here is where delivery actually sits:
A Reuters analysis in August 2026 reported that new dwelling commencements in Australia fell 11.2% in the first quarter of 2026, with annual commencement growth slowing to 0.2% from 26.1% (Reuters, August 2026). The Housing Industry Association forecasts Australia will fall short of the 2029 target by about 15%.
No state or territory is currently on track to meet its share. The ACT, for example, delivered only 2,077 new homes in the first year of the Accord against a share of 4,200 a year (Master Builders ACT, via CityNews).
In February 2025, the Productivity Commission released a research paper, Housing construction productivity: Can we fix it?, that made the problem impossible to look past. The headline findings were stark:
Master Builders Australia’s National Director for Policy and Legal, Melissa Byrne, told a Senate Committee hearing on productivity in April 2026 that the typical amount of output delivered per hour by a construction worker is now 20% lower than it used to be, and that this productivity decline is the single biggest reason the Housing Accord target is slipping.
The picture repeats at the state level. The Queensland Productivity Commission’s 2026 interim report found that Queensland’s construction productivity has dropped around 9% since 2018. Had productivity simply held steady, an extra 77,000 dwellings could have been built in Queensland alone since 2018.
Taken together, the message from the Productivity Commission data is that Australia is not short of workers, equipment or demand. It is short of the ability to turn those inputs into finished homes at the pace required.
Several structural issues sit behind the productivity slide, and together they explain why simply “building more” using the same methods will not close the gap.
Build times keep lengthening. Australian homes are taking longer to build and becoming more expensive to finish, which builders and analysts say directly undermines the 2029 target (Reuters, August 2026). More time on site means more labour hours per home, which further strains the trades workforce.
The labour market is already stretched. The construction industry employed a record 1.37 million workers in February 2026 and still could not fill 21,600 vacancies, with 13 of 15 core residential trades remaining in national shortage (Jobs and Skills Australia Occupation Shortage List, reported via MPA). Infrastructure Australia expects construction workforce demand to peak at 521,000 workers by 2027, with a projected overall labour shortfall of 300,000 by that date, including a trades and labourers gap of 126,000.
Trade prices are rising fast. HIA’s Trades Report shows trade prices rose 5.1% in the first half of 2026, the fastest half year rise since the 2022 post pandemic skills peak (HIA Trades Report, via Building Connection). Bricklaying, ceramic tiling, roofing and carpentry are the worst affected.
Regulatory complexity has grown. The 2022 National Construction Code’s 7 star NatHERS energy efficiency standard, Cladding Safety Victoria rules, bushfire attack level provisions and state based planning differences all add to the time and cost of each home.
Insolvency is removing capacity from the sector. Australia recorded 3,472 construction company insolvencies in the year to 30 June 2026, representing 24.5% of all company insolvencies in the country (ASIC data, via QUT analysis). Every builder collapse removes delivery capacity from the market, stranding sites and subcontractors.
The combined effect is that the traditional on site, stick built model is operating at close to its practical capacity. Even if every one of those record 243,864 homes under construction finishes on schedule, the shortfall continues to widen because of what is not being started quickly enough.
Breaking the Accord target into weekly units makes the scale clearer:
That is a step change from current output. The HIA’s own modelling has concluded that Australia probably needs closer to 250,000 homes a year to actually keep pace with population growth and household formation, independent of the Accord target.
Doing this with the existing stick built workflow would require, by Infrastructure Australia’s own numbers, 300,000 more workers than the sector can currently attract or train. Even a dramatic surge in apprenticeship intake and skilled migration cannot realistically fill that gap by 2029.
If the labour pool cannot grow fast enough and build times cannot be squeezed much further on site, the realistic path to higher output runs through changing where the work happens. This is where modern methods of construction (MMC) come in, and the Productivity Commission’s recommendations explicitly call for removing barriers to their uptake.
Prefabricated LGS wall frames, roof trusses and floor joists are designed in 3D BIM software, cut to CNC tolerances in a factory, and delivered to site ready to install. A frame that would take a traditional carpentry crew days to measure, cut and build on site arrives already numbered, bundled and sized to spec.
The productivity numbers from recent Australian research back this up. A UNSW study on a multi warehouse project in Dapto, NSW, and five similar builds across the state found that prefabricated LGS panels in non load bearing applications reduced installation time from 13 working days to 4 working days compared to on site steel framing, and delivered around 39% cost savings (UNSW research, reported via LSF Association).
LGS also sidesteps timber specific issues: it does not shrink, warp, swell with moisture, attract termites or require chemical treatment, which cuts both site time and callback risk. For a deeper comparison, our guide to steel stud vs timber stud framing sets out how the two systems perform in Victoria’s climate.
Modular construction takes prefabrication further. Entire rooms, pods or whole dwellings are built off site inside a factory and craned into place. The Productivity Commission’s research found that traditional builds can take up to 12 months, while prefabricated builds can be finished in around 16 weeks (Housing construction productivity: Can we fix it?, via Pursuit, University of Melbourne).
Queensland’s QBuild Modern Methods of Construction program is already delivering social and affordable housing at scale using modular techniques. The Australia Modular Construction Market reached around USD $3,455 million in 2025 (Ken Research), and is forecast to grow strongly through 2026 to 2031. Our modular building page covers how steel framing fits into these programs.
The limitation of volumetric modular is scale. Modular facilities need investment, planning approvals, and a steady pipeline of repeatable projects to make the capital spend worthwhile.
Panelised construction is the most widely adopted form of prefabrication in Australia today. Flat wall, floor and roof panels are built in a factory and assembled on site. It fits inside existing project workflows without requiring a volumetric facility, a crane large enough to lift whole modules, or oversized transport permits.
Industry commentary from The Good Builder estimates that prefab methods already help builders deliver homes up to 50% faster than conventional construction.
Behind every effective prefabrication system is a BIM model that catches clashes before any component is cut. Clash detection, model based shop drawings and CNC ready data mean that a frame leaves the factory already coordinated with the services, cladding and finishes that will follow it on site. This is the design side of the productivity equation that often gets overlooked, and it is covered in more detail in our guide to how 3D BIM modelling works in steel frame construction and why it matters.
Australia’s prefab share sits at less than 5% of total construction output (Infrastructure Australia, Productivity Commission, prefabAUS; summary via Ken Research). For comparison:
The regulatory environment in those countries is designed around prefab as a mainstream method rather than a niche. The construction system in Australia, by contrast, grew up around stick framing and still largely treats prefab as the exception. A representative view from Vida Wood Australia’s Managing Director, quoted in Wood Central in 2026, is that Australia is “almost forced, if it ever wants to reach its one million housing level, to fully embrace prefab”.
The Productivity Commission’s recommendations and the Property Council and HIA’s advocacy point to a consistent set of structural changes:
None of these are a silver bullet. But together they would shift Australia from a system that treats prefab as the exception to one that uses it where it actually makes the arithmetic work.
For the builders, developers and project managers actually putting projects together in 2026 and 2027, the macro data has three immediate implications.
Build methods are already a cost and schedule decision, not just a design preference. On a tightly priced project, a frame that arrives on site cut to tolerance and ready to stand in days rather than weeks is the difference between hitting a milestone and watching the critical path slip. Our guide to how much steel framing costs in Australia sets out the main factors that affect pricing, and most of them shift favourably when a project uses a prefabricated frame.
Multi unit and townhouse projects benefit most. Repeated bays, consistent floor plates and standardised details are exactly the conditions where prefabrication delivers its best productivity gains. For more on how this plays out specifically, see our guide to steel framing for townhouse and multi unit developments in Melbourne.
Social, NDIS and childcare projects are already shifting. State governments, including Victoria, NSW and Queensland, are increasingly backing modular and prefab approaches for public housing, NDIS specialist disability accommodation and childcare centre construction. Our blogs on NDIS and accessible housing and steel framing for childcare centre construction cover how LGS plays into both.
CMC Steel Solutions designs, engineers and manufactures prefabricated light gauge steel frames at an in house facility in Craigieburn, delivered to project sites across Melbourne and Victoria. The six stage process we use, starting with 3D BIM modelling and finishing with on site delivery and a Reg 126 certificate, is designed to compress the parts of a project that typically slow a traditional build down:
For residential, commercial, industrial and child care projects alike, this converts a significant chunk of what would be on site carpentry labour into off site CNC cut componentry, which is exactly the shift the Productivity Commission’s data suggests Australia needs more of. The prefab steel frame page sets out the full technical scope of what we fabricate.
Build method | Typical build time | Site labour load | Comment |
|---|---|---|---|
Traditional stick built | Up to 12 months | Highest | Weather dependent, trades heavy |
Panelised prefab (LGS or timber) | 4 to 8 months | Reduced | Panels built off site, erected on site |
Volumetric modular | Around 16 weeks | Lowest | Majority of work done in factory |
Prefabricated LGS (non load bearing) | Install time cut by around 69% vs on site steel | Significantly reduced | UNSW research, Dapto study |
Sources: Productivity Commission 2025; UNSW research via LSF Association; The Good Builder.
The National Housing Accord commits Australian governments to deliver 1.2 million new, well located homes between 1 July 2024 and 30 June 2029, equivalent to 240,000 homes a year.
By mid 2026, Australia was more than 112,000 homes behind the required run rate. Only around 173,000 homes were completed in 2025 against a target of 240,000. The cumulative five year shortfall is now projected at 180,200 homes.
The Productivity Commission identified several drivers: a highly fragmented industry with limited scale, low innovation uptake, regulatory complexity, planning approval delays, and workforce shortages. Physical housing construction productivity has fallen 53% in 30 years.
Yes. Prefabricated homes can be built in around 16 weeks compared to up to 12 months for traditional builds, according to the Productivity Commission. Prefabricated LGS panels have been shown to install around 69% faster than on site steel framing in UNSW research.
Australia’s prefab share sits at less than 5% of total construction output, vs over 80% in Sweden. The gap is partly historical (the industry grew around stick framing) and partly regulatory (planning and certification systems still treat prefab as the exception).
LGS frames are designed in 3D BIM software, cut to CNC tolerances in a factory, and delivered to site numbered and ready to install. This removes measuring, cutting and framing time from the site programme, and avoids weather delays that affect on site work.
CMC Steel Solutions designs, engineers and manufactures light gauge and structural steel frames in house at its Craigieburn facility, supplying residential, commercial, industrial and childcare projects across Melbourne and Victoria.
If you are planning a residential, commercial, industrial or child care project in Melbourne or wider Victoria and want to understand how a prefabricated steel frame can shave weeks from your programme, call CMC Steel Solutions on 1300 285 566, email info@cmcsteelsolutions.com.au, or contact us online to talk through your project.