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NSW developers can now access a pre-finance guarantee, with the state government backing up to $1 billion in off-the-plan housing projects as guarantor.
Following the NSW 2025–26 budget, the government announced it will be a guarantor to eligible residential pre-sales for up to $1 billion of housing projects in a bid to speed up dwelling construction.
Under the five-year Pre-Sale Finance Guarantee, the state government will guarantee up to 50 per cent of approved housing projects, offering $5–$50 million per project.
Currently, off-the-plan developers require between 50 per cent and 80 per cent of pre-sold dwellings to secure funding through a lender, which has seen projects halt and delay construction further.
Through the new scheme, the state said it will guarantee the pre-sale of up to 5,000 apartments, which would later allow developers to get finance to build 15,000 new homes over five years.
The Property Council of Australia said the new scheme was a timely and pragmatic move to tackle a major obstacle in housing development – securing upfront finance.
Property Council NSW executive director, Katie Stevenson, said the $1 billion scheme answers industry calls for finance solutions, following a roundtable exploring ways to derisk housing projects.
“This is a real breakthrough. Our feasibility research with Savills last year confirmed finance as one of the most significant barriers to feasibility.”
“Projects that tick all the boxes – planning approval, market demand, sound delivery partners – are unable to proceed because developers can’t meet unworkable pre-sale thresholds,” Stevenson said.
Similarly, Housing Industry Association (HIA) executive director NSW Brad Armitage said that pre-sales have slowed building constructions over the years.
“Pre-sales represent a major hurdle for new housing developments, especially higher density housing and apartments. Without sufficient pre-sales, finance is harder to obtain, often delaying construction,” Armitage said.
“Multi-unit construction volumes have halved across NSW since last decade and represents a major obstacle to the state achieving its share of the housing targets under the National Housing Accord.”
Under the new scheme, eligible developers will have to submit their projects for review to demonstrate their capability, capacity, and credibility.
Once approved, construction must begin within six months, with up to $1 billion in guarantees available at any time over five years.
If homes remain unsold, the government will purchase them at a discount to sell, rent, or convert them into affordable or social housing.
Additionally, the NSW government announced it will invest $3.4 billion to boost the construction workforce by training over 23,000 new apprentices and offering up to 90,000 fee-free placements.
Earlier this week, ahead of the 2025–26 budget, the state extended its build-to-rent land tax concession indefinitely, offering a 50 per cent land value reduction to boost rental housing supply.
Stevenson said the budget has been unveiled at a crucial time, which will help reach the National Housing Accord target of 377,000 new homes by 2029.
“Government has recognised the problem and delivered a world-leading solution to fix it – helping to bring much-needed stock to market faster,” Stevenson said.
“Now we’re seeing the fruits of this work take shape and it’s a real win for housing supply,” she concluded.
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