As part of the 2025–2026 State Budget, the NSW Government has unveiled a $1 billion Housing Guarantor Scheme — a bold move aimed at getting stalled apartment projects back on track and boosting much-needed housing supply across Greater Sydney.
With the scheme set to underwrite up to 5,000 new homes, particularly in areas hit hardest by rising construction costs and tighter finance conditions, this marks one of the state’s most direct interventions in the housing market to date.
Major Housing Reform: What’s the Guarantee Scheme?
The initiative is part of a wider national push to address the housing crisis. At its core, the Housing Guarantor Scheme offers a government-backed guarantee for up to 50% of pre-sales in eligible apartment developments. This gives banks greater confidence to issue loans, especially in projects where market conditions or risk profiles have limited private financing.
Key features include:
- Applications expected to open by the end of 2025
- Designed to support up to 15,000 homes nationwide over five years
- If guaranteed homes remain unsold, they may be converted to social or affordable housing, or sold by the state
The scheme is not a cash subsidy — it’s a strategic financial safety net aimed at reducing barriers to construction finance and restoring developer momentum.
What’s Driving the Policy?
The apartment market has taken heavy hits in recent years.
With construction costs climbing, labour shortages ongoing, and credit conditions tightening, many medium-scale residential projects have been shelved or scrapped altogether — despite being DA-approved and technically “shovel-ready.”
The Guarantor Scheme seeks to break this deadlock, giving developers and lenders a pathway to move forward with confidence. It’s an approach that blends market discipline with public-sector support, acknowledging the reality that private capital alone isn’t delivering at the scale required.
More Than Finance: Fast-Tracking Infrastructure Delivery
Alongside the guarantee, the government is also introducing changes that allow private developers to build public infrastructure — including roads and parks — with state pre-approval.
This is particularly significant in outer-suburban growth areas, where delays in infrastructure delivery have historically slowed or stalled new communities.
This reform aims to:
- Accelerate the delivery of key infrastructure
- Empower developers to manage timelines more effectively
- Encourage investment in greenfield and fringe areas
Together with the finance guarantee, this move signals a systemic shift toward faster, more coordinated housing delivery.
A Welcome Move — With Risks to Watch
While the scheme has been broadly welcomed as a practical response to housing supply pressures, it does raise some concerns:
- What if underwritten dwellings don’t sell?
- Will quality and compliance suffer under faster timelines?
- How will the state manage the financial exposure tied to project performance?
These risks highlight the need for robust cost planning, transparent delivery oversight, and stronger governance over shared facilities and strata arrangements — especially in larger mixed-use and apartment precincts.
Implications for the Building Industry
For builders, developers, and construction consultants, this suite of reforms opens a new chapter:
Expect:
- A stronger pipeline of finance-ready projects, particularly in the apartment space
- Increased activity in mid- and high-density developments previously considered unviable
- Greater investor confidence, particularly in Build-to-Rent and social housing segments
- Faster delivery in growth corridors, where developers can now take infrastructure into their own hands
At the same time, expectations around transparency, quality, and project accountability are rising — from both the government and the communities these homes are built for.
Final Thoughts
The NSW Government’s $1 billion Housing Guarantor Scheme represents a turning point in how apartment construction is supported and financed.
It addresses a key blockage in the housing delivery pipeline, while also challenging industry players to lift their standards in planning, reporting, and shared asset management.
As housing pressure intensifies, the building industry now finds itself at the centre of not just a market challenge — but a policy solution.