Construction of more than 300 Sydney apartments will be brought forward under the state government’s $1 billion scheme to help developers finance approved projects that have stalled.
A $900 million complex of 280 luxury apartments in Pyrmont and a 30-unit block in Westmead are the latest projects to benefit from the Minns government’s policy to act as guarantor for up to 50 per cent of off-the-plan dwellings in some eligible proposals, to help developers meet pre-sale hurdles.
Planning Minister Paul Scully said fast-tracking the two projects would build momentum for the guarantee scheme and the state’s housing construction pipeline.
“NSW needs new homes sooner,” he said. “The pre-sale finance guarantee is breaking down barriers and fast-tracking the start of construction for hundreds of much-needed homes for our communities.”
The government expects to underwrite about 5000 dwellings, enabling delivery of about 15,000 homes over five years. The NSW Opposition has criticised the scheme as a “very modest proposal”, and “a drop in the ocean” given the state’s target to build 377,000 new homes by mid-2029.
The first project to utilise the guarantee scheme was developer Perifa Group’s divisive $285 million mixed-use Rozelle Village development, comprising 227 units, on the old Balmain Leagues Club site.
The government last year created a revolving fund to allow developers to borrow to construct mid-rise housing projects with the certainty the government would buy any unsold homes, up to the value of $50 million per project.
The scheme – an Australian first – reduces the number of units a developer needs to have pre-sold before a bank is prepared to give them a loan to start construction. Developers can typically only get lending approval for a project once they hit about 80 per cent of pre-sales.
Since October, eligible developers with approval for developments and some initial pre-sales have been able to submit an expression of interest to have the government act as guarantor on up to 50 per cent of the dwellings, which can be valued at up to $2 million each, in each project. If approved, the developer must start construction within six months.
If the developers do not pre-sell the homes, they can call on the guarantee, and the government will purchase the completed dwellings at a discounted rate before selling them on the private market to buy or rent or using them for social or affordable housing. If the developer secures the pre-sales, the guarantee is extinguished and the funds will go back into the $1 billion fund for another project.
Developers have so far submitted 45 expressions of interest, with about one-third of those invited to prepare full applications. Further requests are being assessed that, if approved, could fast-track the construction of more than 130 new homes in regional NSW.
Melbourne-based developer Landream is leveraging the guarantee for 38 of about 280 units in its Pyrmont Place mixed-use development opposite Wentworth Park. The fund will also support 13 flats in Gaby Group’s Elodie complex, including six affordable dwellings, on Good Street in Westmead.
The three pre-sale guarantees issued so far will accelerate the delivery of more than 540 new homes.
Meantime, the government has appointed property investment executives Deb Coakley and Tim Hallam as chair and deputy chair, respectively, of its pre-sale finance guarantee advisory committee.
Scully said the pair would bring their expertise in governance, finance and project delivery to the committee, which “assists in providing robust and independent evaluations of applications”.
Opposition planning spokesman Chris Rath questioned Scully about the fund during a budget estimates hearing in March, asking: “Are things really that financially bad in the housing construction sector that the government has to underwrite or guarantee individual projects?”
Scully responded it was “not that they are financially bad. I think this speeds things up”.
Developers had raised the “particularly high bar in terms of pre-sales” in discussions with the government about projects which had been approved, but that hadn’t begun construction, he said.
“I think this is actually a really innovative approach to using the government’s balance sheet without any up-front money from taxpayers.
“In the worst of all circumstances, we would end up as a government with a small number of dwellings, that we would acquire at a discount, that we could then use for social housing, for affordable housing, as rental housing for essential workers, or just to sell ourselves,” Scully said.
Scully said the scheme was being copied by South Australia, and “examined seriously” in New Zealand.
Treasurer Daniel Mookhey previously said Treasury modelling showed the state’s property market would need to slump by 15 per cent before the government would lose money on the scheme.
Mookhey on Sunday said Labor was “using the NSW budget to help the household budget”.
“In a dual cost of living and housing crisis, we are pulling every lever to support the delivery of desperately needed new homes,” he said.
NSW completed nearly 44,000 dwellings in the year to September 2025, well short of an annual target of 75,000 new homes.
The Morning Edition newsletter is our guide to the day’s most important stories, analysis and insights. Sign up here.
