Next step in transforming development approaches in NSW

The NSW Parliament has passed new legislation that will reshape how buildings are approved, delivered and regulated across the state.

The Building (Approvals and Practitioners) Bill 2026 introduces reforms designed to modernise the building approval system, support the adoption of modern methods of construction, strengthen practitioner accountability and improve confidence in building outcomes.

The building industry is undergoing significant transformation. Increasing demand for housing, changing expectations around sustainability, advances in technology and the need for improved building quality are driving governments and industry to rethink traditional approaches.

A key element of the NSW reforms is supporting modern methods of construction, including prefabricated and modular building approaches. The reforms seek to provide greater certainty around approvals pathways and enable innovative construction approaches while maintaining appropriate standards for safety and quality.

“For HVAC&R professionals, this evolution reinforces the importance of early collaboration between designers, engineers, manufacturers, builders and other specialists,” says AIRAH CEO, Sami Zheng Affil.AIRAH.

“Building services cannot be an afterthought – they must be integrated into the design and delivery process from the beginning.”

Parts of the HVAC&R scope on construction projects including mechanical services, electrical services and fire safety systems that fall under provisions of the Building Code of Australia are all subject to the new requirements.

Property Council welcomes the new legislation

The Property Council of Australia says it is an important step towards a more streamlined, productive and accountable building system.

Property Council NSW Executive Director Katie Stevenson said the reforms would modernise the state’s fragmented approvals framework and create clearer pathways from design to completion.

“By consolidating building approvals, practitioner registration and enforcement requirements, these reforms will reduce duplication, improve certainty and help turn planning approvals into safe, high-quality homes more quickly,” Stevenson says.

The legislation also makes NSW the first Australian jurisdiction to formally recognise modern methods of construction (MMC), including prefabricated and modular buildings.

“The Bill provides an important foundation for the NSW Government’s 2026–27 Budget commitments to modernise building approvals, establish an MMC regulatory and national certification framework, fund housing innovation and expand local manufacturing capacity,” Stevenson says.

Improving compliance

NSW Building Commissioner James Sherrard says the reforms will make it easier for people to understand and comply with building requirements. 

“Not only will these laws encourage the nation-leading adoption of MMC, but they also give industry and consumers alike more confidence in every stage of the building process – from approvals to construction to certification.”

The new regulatory framework recognises MMC in law by defining “prefabricated buildings” and integrates prefabricated buildings into the building approvals system. It also sets clear rules for the manufacture, supply, transport, delivery and installation of prefabricated buildings.

Greater focus on collaboration and early design input

Zheng says that as construction methods evolve, building services professionals will increasingly need to engage earlier in projects.

“For modular and prefabricated construction, HVAC&R systems may need to be designed, coordinated and manufactured alongside other building components before construction reaches site” she says.

“This creates opportunities for members with expertise in integrated design, digital engineering, prefabrication and performance-based solutions.”

Increased importance of technical capability and registration requirements

The reforms also reinforce the importance of competent, qualified practitioners being involved in building outcomes.

“AIRAH has long advocated for a highly skilled and professional workforce. These changes highlight why ongoing professional development, technical knowledge and recognised competency pathways remain essential,” Zheng says.

Stronger focus on building quality and accountability

The reforms also strengthen aspects of practitioner oversight, including clearer requirements around certifiers, conflicts of interest and compliance responsibilities.

Specific measures that streamline approvals processes include:

• Removing duplication between building and planning legislation,
• Simplifying building and completion approvals,
• Establishing a system of staged approvals to allow construction to begin and for people to move in as early as possible,
• Allowing minor variations to a building’s approval – like changing the size of a door or installing a tap outside – to be approved without the need for a new planning consent if it fits the approval framework,
• Operating in an easy-to-use digital environment,
• Creating a single authoritative source of truth for consumers, regulators, and industry, making the approvals process easier for everyone who needs to access it.

The NSW Government media release states these changes will, “save the building industry valuable time and reduce costs.”

“Requiring just one set of designs for apartment buildings to gain building approval is expected to save an average of $327,000 in design costs per apartment block alone,” it says.

Zheng notes that for HVAC&R professionals, this reinforces the importance of accurate documentation, quality installation, commissioning and verification.

“Delivering compliant systems is not only a regulatory requirement — it is fundamental to occupant health, safety, comfort and energy performance.”

What should we do now

AIRAH will continue to support members to stay informed as the reforms are implemented. 

“The regulatory changes also spotlight the ongoing importance of professional registration for mechanical services engineers and for the trade subcontractors delivering approved designs and regulated works packages,” Zheng says.

Practitioners need to familiarise themselves with the legislation and consider how it may affect their work on projects and their professional duty of care and legal responsibilities.

“Continuing Professional Development is crucial for maintaining and strengthening technical knowledge. It also sits alongside demonstrating professional competence, integrity and accountability through recognised pathways such as AIRAH Professional Engineer Registration (APER),” Zheng adds.

AIRAH is hosting a webinar on APER on August 25, 2026, featuring Ian Harwood, F.AIRAH. He will detail the process of becoming recognised under APER, and explain how the APER scheme allows an engineer to take the next steps to attain registration with their relevant state body, and what that process entails.

Find out more and register here.

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