Now a group of Australian researchers has found one person's fashion mistakes could one day be another's home.

A team from the University of NSW has discovered a way to turn old clothing into building products, such as flat panels.

With an estimated 92 million tonnes of clothing thrown out every year, the researchers say the findings have important implications for global efforts to reduce waste.

"It could be said that consumers and the fashion industry have a lot to answer for, given that clothing is now one of the biggest consumer waste streams," lead researcher Professor Veena Sahajwalla said in a statement on Wednesday.

"Rather than export our rubbish to create more landfill, green microfactory technology has the potential to enable small and large-scale creation of newly manufactured products instead."

The new materials can be transformed to have a wood veneer or ceramic-style finish and have tested well in labs for strength, flexibility, load bearing capabilities and fire and water resistance.

More lab testing will be needed, however, before researchers can apply to have the materials assessed against construction regulations.

The world's population is expected to jump to 9.8 billion by 2050, and Ms Sahajwalla says more solutions like these are needed to preserve the earth's resources.

It's an issue the university's centre for sustainable materials research and technology has been working to address through the establishment of series 'microfactories' focused on turning waste into usable products.

But the university can't do it alone.

A major impediment is getting the technology commercialised and into the market, Ms Sahajwalla says.

She's calling on the government to develop incentives that will attract industry investment.

Australian Associated Press