A housing manufacturing hub could change the way homes are built for Australia's most expensive housing market.
The NSW government says its upcoming state budget, to be delivered on Tuesday, will include funding to set up a partnership with a private manufacturer to supply pre-fabricated or modular housing.
The planned Modern Methods of Construction Innovation Facility will be aimed at producing high-quality housing faster to reduce construction times, lower costs and strengthen the building supply chain.
Premier Chris Minns said the housing crisis was one of the greatest challenges facing the state.
"We are pulling every lever to build more homes faster," he said on Sunday.
"The way we build homes has barely changed for generations - but the housing pressures facing NSW demand new thinking, new technology and new solutions."