The Commonwealth Bank of Australia has joined prefabAUS
The Commonwealth Bank of Australia has announced it will become the first bank to join prefabAUS, the industry body for Australia’s off-site construction sector, while also introducing policy changes to simplify the home buying journey for prefabricated housing.
CBA has agreed to sponsor the development of a standard form contract for the modern methods of construction (MMC) sector to help support home buyers and manufacturers.
Standard-form contracts for traditional on-site construction allow home buyers to enter into an agreement and commence dwelling construction on-site with bank finance. However, this streamlined process does not currently exist for the prefabricated construction industry where homes are built off-site, says CBA.
At the Treasurer’s Investor Roundtable in November, banks and other investors committed to addressing barriers to financing modern methods of construction, in particular pre-fabricated housing.
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“Prefabricated construction is fast, efficient and can play a meaningful role in addressing Australia’s housing shortage,” CBA group executive business bank Mike Vacy-Lyle says.
“To date, however, everything about construction has been created with traditional, on-site work in mind, and we need to rapidly reimagine how we support this industry to unlock scale and deliver more quality and sustainable homes to market sooner.
“CBA has a track record of supporting innovative construction companies, including our work with Modscape since 2017, to bring cutting-edge home-building technology to Australia. Now, we’re proudly joining prefabAUS to work closely with and support local manufacturers.
“Overseas in countries like Sweden, 80 per cent of houses are being factory built, and we would expect to see Australia’s prefabricated construction sector expand rapidly.”
The bank also plans to introduce policy changes later this quarter, to help improve access to finance for those Australians who are considering purchasing a prefabricated home. Under the new policy, Commonwealth Bank will enable customers to access progress payments prior to the property being affixed to land, up to 60 per cent of the total contract price, rather than the customer having to fund up to 90 per cent of the upfront costs, which has previously been the case.
Customers who use an accredited CommBank prefab manufacturer to construct their property will be able to access progress payments up to 80 per cent of the total contract price.