The Property Council of Australia today welcomed the NSW Government's announcement of a Pre-Sale Finance Guarantee as part of the 2025-26 NSW Budget, calling it a bold and practical response to one of the biggest barriers to getting new homes built - access to finance.
Property Council NSW Executive Director Katie Stevenson said the five-year, $1 billion scheme responded directly to calls made by the Property Council for a financing mechanism to unlock projects held back by commercial risk and lending constraints.
"In May last year, the Property Council partnered with the Australian Banking Association to convene a Ministerial Roundtable, gathering leaders from industry, finance and government to explore ways to de-risk housing projects and improve feasibility," Ms Stevenson said.
"The event identified the growing difficulty developers face in meeting pre-sale thresholds as a major barrier to feasibility.
"In direct response to the recommendations from the Roundtable, last year's NSW Budget committed $1 million to investigate a guarantee scheme to enable residential developers to secure funding to accelerate the completion of residential housing. Now we're seeing the fruits of this work take shape and it's a real win for housing supply," she said.
Under the Pre-Sale Finance Guarantee, the Government will act as guarantor on up to 50 per cent of pre-sales for approved housing projects, providing between $5 million and $50 million in guarantees per project. Developers and projects will be assessed based on their credibility, capability, and capacity and, if approved, construction must begin within six months of signing.
Ms Stevenson said the scheme will operate through a revolving fund of up to $1 billion at any one time and is expected to start accepting applications by the end of 2025.
"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," Ms Stevenson said.
"The Pre-Sale Finance Guarantee responds directly to that issue and to the conversations we kickstarted last year. It couldn't come at a more critical time when we're facing a steep climb to achieve our 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." Ms Stevenson said.
The Property Council will host NSW Treasurer Daniel Mookhey at a post-Budget address and Q&A this Thursday.
