The Minns Labor Government is today announcing a Pre-Sale Finance Guarantee to accelerate housing construction and help tackle the state's housing supply challenges as part of the 2025-26 Budget.
Under the five-year Pre-sale Finance Guarantee, the NSW Government will leverage its strong fiscal position to go guarantor on up to 50 per cent of approved housing projects so developers can begin construction.
The Government will guarantee residential pre-sales for up to $1 billion of housing projects at a time through a revolving fund.
The Australian first will provide between $5 million and $50 million in pre-sale guarantees for each project and is expected to be accepting applications by the end of 2025.
How the Pre-sale Finance Guarantee Works
- Developers with planning approval and initial pre-sales can apply for the Pre-sale Finance Guarantee, subject to lender approval
- The NSW Government will assess projects and developers based on their credibility, capability, and capacity
- If approved, construction must begin within six months of signing the documents
- After projects are complete and dwellings sold, the government will issue further guarantees for up to $1 billion of projects at any one time for the 5-year duration of the program
- If dwellings remain unsold, the developer can "call" on the guarantee and the Government will purchase them at a discounted rate
- These homes could then be sold to buy or rent, or kept as affordable or social housing
Meeting pre-sale requirements has been the most common issue cited by stakeholders in securing finance, and has been outlined as a key hurdle for industry in the NSW Productivity and Equality Commission's Review of housing supply challenges and policy options for New South Wales.
In fact, the number of pre-sales required to secure funding from a registered financial lender has increased in some cases, from 50 per cent of the dwellings to 80 per cent of the dwellings over the last few years.
This leads to projects remaining on hold while the requisite number of pre-sales is secured, which can delay construction for months or even years.
This announcement builds on the strong foundations we have laid to make sure more people have access to more homes across NSW, including:
- Our Low and Mid-Rise Housing Policy, which is set to deliver 112,000 homes across NSW over the next five years
- Transport Oriented Developments which will deliver 230,000 more affordable, well-located homes around 45 transport hubs
- The Housing Delivery Authority which has recommended that 136 projects be declared as State Significant since it commenced in January 2025. If approved, these projects will deliver 53,500 new homes - more than the entire number of homes built in NSW last year
- Planning approvals are already 17 per cent faster than in March 2023, applications to build are up 28 per cent on last year, and more than 70,000 homes are under construction
- We have created a better, fairer system for 2.3 million renters and have helped more than 60,000 first home buyers achieve their dream with no or discounted stamp duty under our First Home Buyers Assistance program
And there's more still to come as the Minns Labor Government works to build a better NSW for today and for future generations.
