Tasmania will guarantee bank loans for modular home builders under a new scheme the state government says will deliver cheaper homes faster.
Premier Jeremy Rockliff announced the Modular Housing Finance Guarantee this week, saying the state would back construction loans for homes built off-site, where banks have been reluctant to lend.
Because modular homes are built off-site, there is no house on a block for a bank to use as security during construction.
That has made finance harder to obtain and slowed the take-up of a building method the state government says is faster and cheaper than traditional construction.
Under the scheme, the government guarantee will cover the loan while the home is being built.
It will then reduce as construction progresses and end once the home is installed and a normal mortgage takes over.
The state government says the change will lower upfront costs and improve access for first-home buyers, while lifting housing supply without building the homes itself.
Eligibility will be limited to approved lenders and accredited Tasmanian builders, although those terms are yet to be defined.
The government has not said how much the guarantee could cost the state if builders default or how many homes it expects the scheme to deliver.
Legislation is due in the August sitting.
Master Builders Tasmania has backed the move. Chief executive Jenna Cairney said financing had not kept pace with how quickly modular homes could be built.
“This is government removing a barrier rather than adding one,” Cairney said.
Cairney said the sector wanted to see the detail before legislation, including who counts as an approved lender and accredited builder and what safeguards apply.
The announcement comes as Tasmania falls short of its housing targets.
Master Builders Tasmania says the state approved 2,449 new homes in the year to March 2026, less than half the 5,162 a year it says are needed under the National Housing Accord.
The group forecasts Tasmania will finish the accord’s five-year term about 14,000 homes short.
Master Builders Australia separately forecasts Tasmania will fall about 45 per cent short of its accord share by June 2029.
Australian Bureau of Statistics figures show Tasmanian dwelling approvals rose 42.2% in April, the largest increase of any state or territory.
Master Builders Tasmania says that equated to 283 approvals for the month, the strongest result since February 2025.
