Prefabricated Homes on the Rise! Australian Banks Ease Lending Rules, Ushering in a New Era of Housing – Sydney Auction Clearance Rate at 69% in the First Week of 2025

Week’s Key Focus

Australian Banks Ease Lending Rules for Prefabricated Homes, Boosting Housing Supply Solutions

As Australia’s housing crisis continues to intensify, both the government and the banking sector are seeking innovative solutions to accelerate housing construction. In a significant move, the Commonwealth Bank of Australia (CBA) recently announced an adjustment to its lending policy, easing financing restrictions for prefabricated homes. This policy shift is expected to drive growth in the prefabricated housing market and support the Australian government’s ambitious target of delivering 1.2 million homes by 2029.

For years, financing prefabricated homes has been a major challenge for buyers. Under traditional lending policies, homebuyers were required to self-fund 90% of the construction costs before the home was installed on-site, with banks only providing the remaining 10% as a final-stage loan. However, under CBA’s revised policy, buyers can now access progress payment loans covering up to 80% of construction costs before the home is affixed to the land, with a maximum loan amount of $1.5 million for prefabricated homes over 30 square metres. In addition, CBA plans to introduce standardised loan contracts for prefabricated housing to streamline approvals and reduce financing barriers. This move is expected to ease financial pressures on buyers while increasing market confidence in prefabricated homes.

Prefabricated homes have gained increasing global recognition for their faster construction times, cost-effectiveness, and environmental benefits. The Australian government sees them as a potential mainstream housing solution to tackle supply shortages. According to the Productivity Commission, prefabricated housing can reduce construction costs by up to 20% and halve build times, significantly improving the efficiency of housing supply. While transportation costs may offset some of the savings, the faster completion time can help buyers save on rental expenses and mortgage interest payments while waiting for their homes to be built, ultimately optimising overall housing costs.

Industry experts believe that CBA’s policy shift could trigger a domino effect, encouraging other banks to follow suit and provide broader financial support for the prefabricated housing sector. Mathew Aitchison, a professor at Monash University, noted that restrictive lending rules for non-fixed assets have long been a barrier to industry growth. By relaxing these constraints, CBA is removing unnecessary hurdles and paving the way for wider adoption of prefabricated housing. The federal government aims to increase the share of prefabricated homes to 15% of the national housing supply, and this policy change is a crucial step toward achieving that goal. With improved financing options and strong government backing, prefabricated homes could become a key pillar of Australia’s housing market, offering buyers more affordable choices while accelerating efforts to resolve the housing crisis.


Auction Results Last Week

  • Sydney: 479 properties went to auction, with 271 results reported and 187 properties sold, resulting in a clearance rate of 69%. The total auction value was $216,683,500 AUD, with a median house price of $1,380,000 AUD.
  • Melbourne: 476 properties went to auction, with 317 results reported and 220 properties sold, resulting in a clearance rate of 69%. The total auction value was $156,734,100 AUD, with a median house price of $756,750 AUD.

Top 5 Auction Prices in Sydney Last Week: Houses

▼TOP 1. AUD  $4,350,000

Address: 3 Wirra Cl, St Ives NSW 2075

Land Size: 1176 sqm

House | 5 Bed | 5 Bath | 2 Parking

▼TOP 2. AUD  $3,950,000

Address:17 Lihon St, Lane Cove NSW 2066

Land Size: 556sqm

House | 5 Bed | 2 Bath | 2 Parking

▼TOP 3. AUD  $3,280,000

Address:36 Mortlake St, Concord NSW 2137

Land Size: 500 sqm

House | 5 Bed | 2 Bath | 2 Parking

▼TOP 4. AUD  $2,757,000

Address:144 Thomas Boulton Cct, Kellyville NSW 2155

Land Size: 701 sqm

House | 5 Bed | 3 Bath | 2 Parking

▼TOP 5. AUD  $2,750,000

Address:20 Illarangi St, Carlingford NSW 2118

Land Size: 350 sqm

House | 9 Bed | 5 Bath | 3 Parking


Top 5 Auction Prices in Sydney Last Week: Units

▼TOP 1. AUD   $3,400,000

Address: 1103/118 Alfred St S, Milsons Point NSW 2061

Unit  | 3 Bed |  2 Bath |1 parking

▼TOP 2. AUD   $2,800,000

Address: 27 William St, Concord NSW 2137

Duplex | 3 Bed |  2 Bath |2 parking

▼TOP 3. AUD   $2,600,000

Address: 1/12 Earl St, Mosman NSW 2088

Townhouse |  3 Bed |  2 Bath | 2 Parking

▼TOP 4. AUD  $1,830,000

Address: 301/2 Mindarie St, Lane Cove NSW 2066

Unit | 3 Bed | 2 Bath | 2 Parking

▼TOP 5. AUD   $1,750,000

Address: 573/16 Oaks Av, Dee Why NSW 2099

Unit |  3 Bed |  2 Bath  | 2 Parking


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