Salesa said other changes would also likely mean that the number of inspections factory-made buildings had to go through would be halved, allowing greater mass production.
"Prefabrication and off-site manufacturing are the future of construction as they help produce high-quality buildings more quickly than traditional building approaches," she said.
The legislation is expected to be introduced in Parliament early next year.
Other changes announced include the introduction of requirements for information about building products.
"Councils have told us this will help them better assess compliance with the Building Code. Delays in consenting cost a building owner around $1000 for each week of delays," Salesa said.
"Roles and responsibilities for manufacturers, suppliers and builders will also be made clearer, so the right person can be held to account if things go wrong."
Decisions would be made next year about changes to occupational regulation within the sector, Salesa said.
But the NZ Building Industry Federation has in past questioned whether prefabricated homes would help the situation, saying they were unlikely to be cheaper that on-site construction because of the scale of New Zealand's market and its cyclical nature.