Australia needs to think outside the box when it comes to getting homes built faster, Housing Minister Clare O'Neil has declared.
She is promising a $39.3 million trial of modular, pre-made building components, which could speed up construction times while driving down costs.
"Most homes use the same basic components - walls, windows, roofs, bathrooms, kitchens,'' Ms O'Neil said, ahead of a major speech defending controversial changes to tax concessions for investors.
"So instead of designing everything from scratch every single time, we can standardise some parts of the process and make construction more efficient."
Ms O'Neil has taken inspiration from Sweden, the home of furniture giant IKEA, where about 80 per cent of detached homes are built using prefabricated parts, compared to just five per cent in Australia.
The funding announced on Thursday will go towards a "kit of parts" - a system of home components which can be built off-site and put together in a similar fashion to a supersized IKEA flat-pack.
The system is the brainchild of Building 4.0 CRC - an industry-led research group partly funded by the federal government - and is open-source, meaning businesses across the country can participate without relying on a single proprietary company.
The federal funding would help the states and territories with pilot projects, design work, technical advice, training and supply chain development, Ms O'Neil said.
"When parts are designed to work together efficiently, you can build things faster, cheaper and more reliably," she said.
The federal government also wants more social housing to be made from prefabricated parts as this would create a pipeline of work for the so-far nascent industry in Australia.
Labor is hopeful prefabricated buildings could help make housing more affordable, with dwelling construction prices rising an average of 4.7 per cent in the year to April, according to Bureau of Statistics figures released on Wednesday.
Commonwealth Bank expects home-building costs to peak at eight per cent by September.
Building 4.0 CRC chief executive Mathew Aitchison said his organisation would work with governments and industry to help roll out the kit of parts.
"This is about improving the system that delivers housing - making it more efficient, more consistent and better able to scale over time," he said.
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