A new $1 billion funding initiative could be the key to unlocking thousands of stalled residential developments across NSW.
In a bold response to NSW’s housing crisis, the Minns Government has announced a nation-first Pre-Sale Finance Guarantee, aimed at fast-tracking apartment and housing projects that are struggling to secure finance.
Under the program, the NSW Government will act as a guarantor for up to 50% of units in eligible apartment or townhouse developments. This guarantee will help developers meet bank lending conditions—particularly around pre-sale thresholds—which are a growing barrier to construction commencement.
Why It Matters?
Currently, developers are often required to pre-sell 70–80% of units to secure finance, a level many cannot achieve in today’s market due to buyer uncertainty and tightened borrowing capacity.
This guarantee effectively reduces developer reliance on off-the-plan sales by giving banks the assurance of government-backed purchases. If the guaranteed units are not sold at completion, the government will purchase them—at a discount—and repurpose them for affordable, rental, or social housing
Program Details:
- Guarantee size: $5 million–$50 million per project
- Cap: $1 billion at any one time (revolving fund)
- Project criteria: Must have DA approval and some pre-sales
- Timing: Construction must begin within 6 months of the guarantee
- Government purcahse of unsold stock: Purchased at a discount for affordable, rental, or social housing
- Applications open: By end of 2025
Potential Market Impact:
- Unlocking Supply: Industry experts estimate this could unlock tens of thousands of apartments, especially in high-density precincts like Parramatta, Randwick, and the Inner West, where many projects are approved but stalled.
- Boost to Construction Sector: With construction costs stabilising and demand building from population growth (NSW net migration exceeded 150,000 in 2023), this guarantee may reignite confidence in the build-to-sell sector.
- Public Housing Stock: The policy also presents a strategic way to expand government-owned affordable housing—ensuring new builds are not left vacant and directly addressing growing social housing waitlists.
Key Industry Considerations:
- Lender response: Banks and non-bank lenders may adjust credit policies if government guarantees become accepted security.
- Pricing floor: Government-backed purchases could stabilise values in key growth corridors.
- Investor re-entry: With presale hurdles lower, institutional and boutique developers may re-engage shelved sites, including in urban infill locations.
This guarantee forms part of the Government’s broader strategy to meet its target of 377,000 new homes in NSW by 2029 under the National Housing Accord.
Applications for the Pre-Sale Finance Guarantee will open in late 2025, with further program guidelines expected to be released over the coming months.
For more details, visit the official announcement: NSW Government Pre-Sale Finance Guarantee