NSW Government Launches New Pre-Sale Finance Guarantee to Accelerate Housing Construction
The NSW Government has rolled out the Pre-Sale Finance Guarantee program as part of the 2025–26 Budget, designed to address critical “housing supply constraints” and fast-track delivery of residential projects across the state. This world-leading, five-year initiative leverages the government’s strong credit standing to act as a “guarantor on up to 50%” of pre-sales required by lenders, allowing developers to commence construction with only half the typical pre-sale threshold—a significant reduction from conditions that have previously held back medium and higher-density developments.
How the 50% Pre-Sale Finance Guarantee Works
Under this new initiative, developers who have secured planning approval and initial pre-sales can apply for the Pre-Sale Finance Guarantee to help cover up to 50% of pre-sales required for construction finance. The government guarantees to purchase unsold stock at a discount, providing reassurance to lenders and greatly reducing financing hurdles for developers.
Key features include:
- A revolving fund of up to $1 billion for pre-sale guarantees, with each project eligible for government commitments between $5 million and $50 million.
- Construction commencement within six months of guarantee approval is mandatory.
- Homes acquired under the program by the NSW State Government may be sold, rented, or retained as “affordable and social housing”, maximising community benefit.
- Applications for the program open by the end of 2025.
Why This Matters for Developers and the Housing Market
Traditionally in NSW, developers have faced significant challenges securing finance. Many buyers were previously hesitant to commit to off-the-plan purchases due to affordability pressures, loss of trust due to extensive defects, and concerns about construction delays or cancellations. This made it difficult for projects to start, especially in higher density housing. With multi-unit projects halving in volume across NSW over the last decade, this new guarantee aims to reverse that trend.
This initiative aims to restore confidence in the market, unlock stalled developments, and accelerate much-needed housing supply. Developers are advised to consult government resources for detailed conditions and fee schedules before lodging applications.
Industry Reactions and Market Outlook
The Pre-Sale Finance Guarantee has been hailed by industry bodies like the Property Council and Housing Industry Association as a “game-changer” that will significantly ease financing bottlenecks. It is expected to catalyse the delivery of approximately 15,000 homes over the next five years, injecting momentum into the NSW housing market.
Government officials emphasize the program’s role in delivering on housing commitments, improving affordability, and supporting economic growth—including upskilling initiatives aimed at addressing labour shortages in construction.
Eligibility and Project Criteria
To be eligible for the guarantee, developments must meet specific requirements:
- Projects must have development approval and demonstrate capability to start works within six months.
- Individual units covered by the guarantee must not exceed $2 million in government valuation.
- Each guarantee is capped at 50% of total project dwellings and the government’s purchase commitment must fall between $5 million and cannot exceed $50 million per project.
- Developers must demonstrate sound delivery capabilities and financial capacity to successfully complete the project.
Community and Economic Benefits
Beyond accelerating housing supply, the program promises substantial social and economic benefits. Homes bought by the Government can be allocated as affordable or social housing, directly addressing housing accessibility concerns. The initiative is also expected to create and sustain thousands of jobs in construction and related sectors across the state, supporting workforce development and upskilling programs.
Application processes (Expressions of Interest) are now open, with formal applications anticipated from October 2025 and the “first commitments expected by late 2025.”