It is generally accepted, that implementation of innovation in housing not only provides homeowners with more affordable homes, and enable developers to build more cost-effective houses; but also affects national economic growth, energy consumption, and a broad range of environmental issues to name a few. This study addresses the decision making process within the complex innovation process in the construction sector by employing a systems modelling process aiming to conceptualise and formulate a systems model. The model aims to adopt a multidimensional view on the links between various factors related to innovation diffusion within construction and housing development. The model structure highlights that developers, architects and end-users, along with decision makers need to acknowledge innovative solutions as a priority in order to achieve the benefits of high-level innovation performance. The results suggest that housing construction sector requires assistance and support from the government in order to accumulate innovation capabilities and endure existing impediments such as lack of financial incentives. Hence, it is important to manage the significant factors related to housing policy making and public policy interventions that affect success in construction innovation. These results can assist decision makers in implementing various innovation planning strategies for future construction and housing development.