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The NSW government has launched its $1 billion Pre-Sale Finance Guarantee scheme to help developers secure funding and fast-track housing construction.
Announced earlier this year as part of the budget, the Pre-Sale Finance Guarantee (PFG) program will see the government commit to spending up to $1 billion to buy up to 50 per cent of homes off the plan in approved NSW housing projects.
The NSW government said the scheme addresses developers’ pre-sale funding requirements hurdle, amid rising wait times from approval to construction, which have increased from 5.6 to 7.8 months over the past five years.
Developers with planning approval and either indicative or binding finance, ready to start construction within six months, can now apply for the guarantee.
NSW Treasurer Daniel Mookhey said the PFG will not only reduce wait times but provide greater security to the residential construction finance sector as well as lenders and home buyers.
“This guarantee will give lenders greater confidence, reduce risk in the housing finance market and accelerate the delivery of new homes across NSW,” Mookhey said.
“This is about turning approvals into actual homes, supporting jobs, boosting housing supply and strengthening the state’s economy at the same time.”
The NSW building commissioner will be involved in the application approval process to ensure that only those who meet the established benchmarks will be eligible for the guarantee.
Minister for Planning and Public Spaces Paul Scully said the guarantee would be a game changer for the sector.
“We have more than 13,000 homes sitting there approved but construction has not commenced,” Scully said.
“This is a bad outcome for our housing delivery, our economy and our communities.
“We’re checking capacity, credibility and capability. We want good quality homes from reputable builders, and we want them soon.”
Property Council NSW executive director Katie Stevenson said the implementation of the guarantee came at a critical time.
“The Pre-Sale Finance Guarantee is designed to break the gridlock of approved dwellings sitting idle by giving lenders greater confidence and developers more certainty,” Stevenson said.
“At a time when NSW faces the steep challenge of meeting its National Housing Accord target of 377,000 new homes by 2029, this is exactly the kind of practical solution we need.
When combined with the recent NSW Planning System Reforms Bill, Stevenson said that the PFG showed the government was serious about tackling feasibility and accelerating housing delivery.
“It’s encouraging to see the momentum building,” Stevenson said.
Minister for Building Anoulack Chanthivong said the guarantee would aim to deliver quantity without sacrificing quality.
“As the Pre-sale Finance Guarantee supports delivering the homes our state desperately needs, the Building Commission NSW will be doing all it can to make sure those homes are well-built by trusted professionals,” Chanthivong added.
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