NSW Reforms: Pre-sale Finance Guarantee Program
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Category — NSW Reforms Series
The NSW Government’s Pre-sale Finance Guarantee is a $1 billion initiative aimed at unlocking stalled residential developments by helping developers meet lender pre-sale requirements. Under the program, the Government may commit to purchasing up to 50% of dwellings in eligible off-the-plan projects, providing a financial guarantee that enhances a developer’s ability to secure construction finance.
Key Features
Eligibility:
Projects must have planning approval and be ready to commence construction within six months.
Dwelling Criteria:
Only dwellings valued under $2 million are eligible and must be offered at a minimum 10% discount off market value.
Developer Flexibility:
Developers may renounce the Government’s commitment if they sell the dwellings privately.
Government Acquisition:
Unsold dwellings may be acquired by the Government for resale or rental, potentially contributing to affordable housing supply.
Oversight:
Administered by Property and Development NSW (PDNSW), with quality assurance from the NSW Building Commissioner.
Our initial thoughts
Strengths
Housing delivery acceleration:
By supporting pre-sale thresholds, the program enables projects to proceed that might otherwise be delayed or abandoned.
Financing Risk is reduced:
The Government’s backing improves lender confidence, helping to de-risk construction finance.
Market Flexibility:
Developers retain the option to sell dwellings privately, offering flexibility in response to market conditions.
Quality Assurance:
The involvement of the Building Commissioner ensures that supported projects meet high compliance and construction standards.
Challenges
Administrative Complexity:
Developers must demonstrate capability, planning approval, and readiness to build within six months. Legal agreements, valuations, and discount negotiations may introduce time and cost burdens, potentially excluding smaller or less-prepared proponents.
Timing Risk:
The six-month construction commencement requirement may be difficult to meet in this volatile environment affected by supply chain disruptions, labour shortages, and rising costs.
Conclusion
The Pre-sale Finance Guarantee Program represents a positive and proactive step toward addressing housing supply constraints in NSW. When considered alongside other recent initiatives, it reflects a genuine effort by the Government to modernise the planning system and accelerate housing delivery.
However, we recognise that like all the recent reform initiatives, greater detail will help to understand specific opportunities and constraints, including:
- Evaluation Criteria:
Greater detail regarding the metrics which will be used to assess a developer’s capacity, capability, and credibility. - Quality Benchmarks:
Further information regarding standards to ensure building quality and regulatory compliance. - Project Merit:
Clarity as to whether broader project merits – such as location, infrastructure access, market feasibility, and alignment with public policy (e.g. affordability, sustainability) – will be considered. - Transparency:
Self-assessment assistance for developers prior to applying, via tools such as a published checklist or scoring system be available.
Clarifying these aspects will be essential to ensure the program is accessible, equitable, and effective in achieving its goals. We look forward to reviewing further information as it becomes available, and assisting clients to understand potential opportunities and constraints.
Read more about the suite of reforms in our article series below, or contact our NSW Planning Team to discuss how the changes might affect your projects or development strategy.
Karmi Palafox
Principal Town Planner
Sydney / Gamaragal Country
Corne van Rooyen
Associate Town Planner
Sydney / Gamaragal Country
Read more about the Pre-sale Finance Guarantee Program here.
NSW Reforms Series
The New EP&A Amendment Act 2025
Planning System Reform Bill 2025
Investment Delivery Authority
