Australia doesn't have one set of rules for modular and prefabricated construction — each state regulates it separately, and in 2026 that's produced a genuinely uneven picture. NSW has just passed the country's first law formally recognising modern methods of construction (MMC). Victoria, despite being home to a large share of the national MMC industry, hasn't passed equivalent legislation — it's still in the consultation stage. This article lays out exactly where each state stands, without overstating either position.
The short answer
NSW has legislated. Victoria is consulting. The Building (Approvals and Practitioners) Bill 2026 passed the NSW Parliament and began taking effect from mid-2026, making NSW the first Australian jurisdiction to formally define "prefabricated buildings" in law. Victoria has not passed comparable legislation — its planning department is still gathering public feedback through an open consultation process ("Enabling modern methods of construction," via Engage Victoria) on what reform should look like, while separately expanding administrative support like an industry directory and faster-approval pilot programs.
This doesn't mean Victoria is doing nothing. It means Victoria and NSW are simply at different stages of the same broader push, and it's worth being precise about which is which.
NSW: legislated, in force, first in the country
Covered in detail in our companion article on the Building (Approvals and Practitioners) Bill 2026, but the essentials:
- Removes the old "manufactured home" exemption from the definition of "building" under the Environmental Planning and Assessment Act 1979, giving prefabricated dwellings the same regulatory treatment as conventional buildings
- Replaces Construction Certificates and Occupation Certificates with Building Approvals and Completion Approvals
- Formally defines "prefabricated building" in law, explicitly excluding moveable dwellings (caravans, tents, wheeled structures)
- Backed by $32.3 million in the 2026/27 NSW Budget for implementation
- Full commencement of the Act is expected around 2027, with supporting regulations progressively finalised through 2026-2027
NSW's own framing of this is not modest: the government has stated it intends for NSW to be the leading jurisdiction in Australia on this issue, and multiple independent legal and industry sources (Clayton Utz, Gadens, Built Offsite, The Fifth Estate) have confirmed the "first in Australia" claim.
Victoria: consultation stage, with meaningful administrative support already in place
Victoria's own planning department is direct about the gap. Its public statement is unambiguous: "We know that the Building Act, which regulates all building and plumbing work in Victoria, does not adequately support this construction methodology." That's an official acknowledgement, not outside criticism.
What Victoria has actually done so far:
An open consultation, not a bill. The Victorian Government is currently seeking feedback on reform options through Engage Victoria's "Enabling modern methods of construction" consultation. This is a pre-legislative stage — options are being developed, not enacted.
A published policy statement. "Shaping the Future of Construction in Victoria: Modern Methods of Construction" sets out the government's supported direction — modernising building regulations, implementing domestic building contracts suited to MMC, and fast-tracking development approvals through the Development Facilitation Program.
Genuine administrative and industry support already delivered, even without new legislation:
- A third edition of the Victorian Prefabricated Construction Directory, helping developers, builders, renovators, government agencies and councils find MMC manufacturers
- Removal of planning permit requirements for small second dwellings in some circumstances
- Deemed-to-comply development standards intended to unlock more housing delivery options
- Victoria is already home to roughly 200 companies across the MMC supply chain, from design and manufacture through to on-site assembly — a genuinely large existing industry base, ahead of the regulatory framework catching up to it
Two related but distinct laws Victoria has passed — worth naming because they're sometimes conflated with MMC-specific reform, but aren't the same thing:
- The Building and Plumbing Administration and Enforcement Act 2026 (passed 12 May 2026, Royal Assent 19 May 2026) creates a new regulator, the Building and Plumbing Commission (BPC), to oversee building and plumbing quality control generally — not modular-specific, but relevant to the overall regulatory environment MMC operates within
- The Cladding Safety Victoria Repeal Act 2026 — unrelated to modular construction; it concerns combustible cladding rectification programs
Side-by-side comparison
| NSW | Victoria | |
|---|---|---|
| Legislative stage | Passed and in force (partial); full commencement ~2027 | Consultation stage — no bill introduced yet |
| Legal definition of "prefabricated building" | Yes, in force | Not yet |
| Manufactured home planning exemption | Removed | Still in place — acknowledged by Victoria as inadequate |
| Certificate terminology change | Construction/Occupation Certificate → Building/Completion Approval | No equivalent change yet |
| Dedicated MMC funding commitment | $32.3 million (2026/27 Budget) | Not specified at this stage |
| Industry support infrastructure | Integrated into new approvals framework | Prefabricated Construction Directory (3rd edition), ~200 MMC supply chain companies already active |
| Approval speed initiatives | Built into the new Bill's structure | Development Facilitation Program (existing, separate from MMC-specific legislation) |
Why this matters if you're comparing NSW and Victoria for a project
If you're building in NSW, the regulatory direction is now clearer and formally backed by law — but note that full commencement is still progressing through 2026-2027, so confirm current requirements with your certifier rather than assuming the entire new framework is already operative.
If you're building in Victoria, your project is still assessed under the existing Building Act framework, which the state's own planning department has acknowledged doesn't fully support MMC. This doesn't mean modular construction is unavailable or unsupported in Victoria — the ~200-company supply chain and the Prefabricated Construction Directory show a genuinely active industry — but the legal clarity NSW has just gained doesn't yet exist in Victoria. Existing pathways (like small second dwellings avoiding a planning permit in some cases) continue to apply, covered in our Victoria council approvals guide.
If you're a builder or developer evaluating where to prioritise MMC investment, NSW's legislated certainty is a genuine differentiator right now — it reduces regulatory risk in a way Victoria hasn't yet matched, even though Victoria's existing industry base is substantial.
What to watch for in Victoria
Victoria's consultation process will presumably lead to its own legislative reform, following a similar logic to NSW's — Victoria's own policy statement uses almost identical language about MMC's potential to build more homes, more quickly, more affordably. The Engage Victoria consultation is the mechanism to watch; submissions and outcomes from that process are likely to shape what a Victorian equivalent to the NSW Bill eventually looks like. No timeline for a Victorian bill has been announced as of this article.
Frequently asked questions
Has Victoria passed a law recognising modular construction like NSW has?
No. As of August 2026, Victoria is in a public consultation stage ("Enabling modern methods of construction," via Engage Victoria) rather than having introduced or passed legislation. NSW's Building (Approvals and Practitioners) Bill 2026 is, by contrast, passed and progressively taking effect.
Does Victoria support modular construction at all?
Yes, through administrative and industry measures rather than new legislation. Victoria publishes a Prefabricated Construction Directory (now in its third edition), has around 200 companies across its MMC supply chain, and has implemented some approval facilitation measures — but its core Building Act has not been updated to formally recognise MMC the way NSW's planning law now has.
What did Victoria's planning department say about its current laws and modular construction?
Victoria's planning department has stated publicly that the Building Act, which regulates all building and plumbing work in the state, "does not adequately support this construction methodology" — an official acknowledgement of the same regulatory gap NSW's new legislation was designed to close.
Are the Building and Plumbing Administration and Enforcement Act 2026 and the NSW modular reforms the same kind of law?
No. Victoria's Building and Plumbing Administration and Enforcement Act 2026 creates a new general building and plumbing regulator (the Building and Plumbing Commission) and is not modular-specific. NSW's Building (Approvals and Practitioners) Bill 2026 specifically defines and integrates prefabricated buildings into the approvals system.
Which state is better for building a modular home right now?
Both states support modular construction in practice, but NSW currently offers greater legal certainty following its 2026 reforms, while Victoria offers a large, established MMC supply chain without the same legislative clarity yet. The right choice depends on your specific site, project and timeline — confirm current requirements with a certifier or planning professional in the relevant state.
The bottom line
NSW and Victoria are both genuinely committed to expanding modern methods of construction — the policy language from each government is strikingly similar in its ambition. But as of August 2026, they're at different stages of turning that ambition into law. NSW has legislated first; Victoria is still building the case for its own reform through public consultation, while supporting the industry administratively in the meantime. Anyone comparing the two states for a modular project should treat this as a genuine, real difference in regulatory certainty — not just a difference in government messaging.
ModuHaus tracks state-by-state regulatory developments across our Council & Approvals guides so you always have a current, verified picture of where your state stands.
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This article is general information only and not legal or planning advice. Legislative and consultation processes are ongoing and subject to change. Always confirm current requirements with the relevant state planning authority, a certifier, or a qualified legal professional before making project decisions.
Last updated: 06/08/2026. Verified against NSW and Victorian Government official sources on 06/08/2026.
Sources and further reading
Requirements change and can be applied differently by site and local authority. Check the current official sources and confirm your project with the relevant council, certifier or qualified professional.