sensum minds #8 - The Future of Housing Delivery
Sensum Minds housing Series - Part 4
Modern Methods of Construction (MMC) is reshaping housing delivery, offering faster build times, greater certainty, higher quality, better value for money, and a more sustainable approach to construction. In this final instalment of the Sensum Minds Housing Series, we explore how MMC is influencing the future of housing, the lessons learned from Sensum projects, and the evolving role of traditional construction in an integrated, prefabricated world.
The concept of prefabrication is not new; it has been a recurring theme for centuries, playing a role in both partial and whole infrastructure delivery across various forms.
Defining MMC in Context
It’s important to position and understand MMC in this discussion. At Sensum, we define MMC as:
Modern Methods of Construction (MMC) describes a broad spectrum of construction methodologies, systems, processes, and products aimed at improving the entire ecosystem to deliver greater efficiency, value for money, quality, and sustainability within the construction industry.
This description encompasses not only the well-known products and systems—such as modular construction, kit-of-parts, and 3D printing—but also the design thinking and strategic approaches that enable efficient planning, design, manufacturing, assembly, construction, and building operations.
What about Industrialised Construction (IC)? At a high level, IC and MMC share many similarities.
MMC Adoption in Australia
The adoption of MMC has gained significant traction in Australia over the past five years. Governments in Queensland, New South Wales, and Victoria have recognised its potential to revolutionise housing construction. These states have committed funding and strategic initiatives to promote MMC, particularly for social and affordable housing projects.
Government backing is crucial for accelerating the adoption of MMC. These initiatives are already driving positive outcomes and setting the pace for the industry. However, our challenge to the industry is clear: while government signals interest and intent, we must collaborate, co-design, plan, manufacture, build, and deliver to align with these signals.
To truly enhance housing delivery and provide visibility into the potential pipeline, we need government agencies to set minimum and stretch targets for projects utilising MMC. These metrics will enable the industry to plan, stabilise, grow, and innovate.
Lessons Learned: Sensum’s Experience with MMC
Since our inception in 2015, Sensum has been delivering MMC projects, gaining invaluable insights into both the opportunities and challenges.
While MMC offers significant benefits—faster build times, higher quality, reduced waste, and cost savings—realising these advantages requires careful planning and coordination from the outset. The right team is critical, and success depends more on the team’s mindset than their MMC experience.
Key considerations include:
A design approach that integrates MMC products and systems.
Clear demarcation between on-site and off-site works.
Focused effort on interface and connection detailing.
Innovation comes at a premium.
Typical tolerances in traditional on-site construction differ from those in manufactured settings. Without addressing these differences, significant time can be lost on-site.
Multi-Storey MMC: The Future of Housing
Multi-storey MMC housing is an exciting and rapidly emerging development in the MMC space, offering medium- to high-density solutions to help address Australia’s housing shortage.
Our recent work with QBuild, facilitating Design Sprint Workshops on Low-Rise MMC housing, highlighted a recurring challenge: the bespoke, project-by-project approach to MMC. Many designs require performance solutions, adding time, cost, and uncertainty to the process.
By bringing together industry experts, MMC suppliers, and specialist engineers, QBuild aimed to align thinking and approaches. Identifying common pain points and recognising existing solutions opens opportunities to standardise approaches—particularly for critical details.
If you’d like a copy of the recommendation reports developed in partnership with QBuild, please get in touch. info@sensum.com.au
Homes NSW: A Vision for MMC
Homes NSW is partnering with the Building 4.0 CRC to develop and demonstrate how MMC can deliver more social, affordable, and key worker homes. Their focus is on speed of delivery, quality, volume, and value for money, while improving tenant outcomes.
This forward-thinking approach ensures MMC adoption supports the entire industry and meets future housing demands within market constraints.
Why Hasn’t it Been Adopted at Scale?
It hasn’t been done before in Australia at scale, for several reasons. Nobody wants to be first, with cost and risk being the main drivers.
There is an innovation premium for early adopters. This initial learning curve that organisations and projects go through, does come with additional costs:
Development and testing of materials and systems,
Mistakes or inefficiencies due to trying something new,
Reorganising business processes.
This premium can range anywhere from 8-15% higher for the initial projects, until that learning curve has passed, and you can see the benefits at scale.
Investors don’t want to pay for the innovation, which requires someone else has to cover the upfront capital – this is where projects often fall over getting the numbers to work. Often when we are brought in to look at this for clients, they are focused on a single project and trying to make the numbers stack up for the required up front capital.
When shifting from a project focus to a program approach, we spread that initial cost across multiple projects, and we achieve scale. The recent Queensland program has demonstrated the success of this.
Of course there are other reasons why MMC hasn’t been adopted at scale;
Compliance and quality
Education of clients, consultants, certifiers and building surveyors
Risk allocation (project and commercial)
Finance, insurance, and a
Fear of standardisation
Modscape, Glen Iris Development (https://modscape.com.au/projects/glen-iris-residential/)
Looking Ahead
“MMC is not a silver bullet to solve the housing crisis. However, enabling MMC alongside traditional approaches enhances our ability to deliver more homes, sooner.” – Scott Hearne
As we look to the future of housing delivery, MMC will continue to play a transformative role. By integrating innovative prefabricated solutions with traditional construction expertise, we can address the challenges of Australia’s housing sector and deliver faster, more efficient, and sustainable outcomes.
Why can it work now?
Government Appetite: There has never been this amount of focus or investment from the Government in the space.
Environmental and Sustainability Drivers: The focus on this sector will continue to grow and we are going to need to do things differently. Shifting to renewable energy sources and sustainable materials, circular economy models, carbon neutrality and regenerative practices, to name a few.
Housing Crisis: We need the ability to pull as many leavers as possible to address the housing crisis and MMC will need to play a role. It won’t be the right choice for all projects, but through volume and standardisation, it can play a role in solving the missing middle, homes in urban locations with affordable rents.
Labour shortage, rising costs and declining productivity.
MMC is going to be a vital enabler in Australia, and it aligns perfectly with the emerging vision of a more sustainable future.
If you’d like to learn more about MMC and how Sensum can support your organisation, please reach out to Scott Hearne or Nick Strongman. They are passionate about the industry and eager to help you be part of the future of housing delivery.