Prefab homes to slash build times and costs

Typically involving construction of components offsite to be assembled onsite, modular and prefabricated techniques have caught the federal government's attention.

Opportunities for unlocking more private sector capital for prefabricated construction will be discussed at an investment roundtable on Friday.

Leaders from banks, super funds and investment firms will join Treasurer Jim Chalmers and Industry Minister Ed Husic at the event in Canberra.

Cutting red tape standing in the way of modular home construction was also flagged as a priority area for a $900 million fund announced last week.

Friday's analysis from the Productivity Commission, an independent government advisory body, found output in residential and non-residential construction could be boosted by two per cent, were the maximum time and cost savings achieved from prefab techniques.

Such an achievement could lift gross domestic product by $5.7 billion a year and lower consumer prices.

With housing affordability and shortages shaping up as a key election issue, Labor is pulling all the levers at its disposal to bring on new supply.

But with a shortage of workers and material costs high, construction has been slow and there's danger a national agreement to build 1.2 million new dwellings will fall short.