The NSW Government has established the Pre-sale Finance Guarantee to accelerate the delivery of housing across the State, ease current supply challenges and provide greater certainty for the industry.
Under the new program, the NSW Government will commit to the purchase of off-the-plan dwellings in eligible residential developments to help developers secure lenders’ approval and commence construction sooner.
There is a growing number of residential projects that have development approval but are unable to proceed to construction due to a shortfall in the pre-sales required to satisfy lenders' pre-condition to commence funding.
By committing $1 billion to the program, the NSW Government is assisting more residential construction projects to start sooner, and more homes to be delivered faster.
The NSW Government is utilising its strong credit standing to provide financial institutions with the confidence they need to start lending and get residential projects underway.
The program could fast-track the delivery of up to 5,000 new homes over the next 5 years, support the creation of thousands of direct and indirect jobs, and help to attract talent and develop skills needed for the ongoing success of the residential construction sector in NSW.
How it will work
The Pre-sale Finance Guarantee will be structured as a renounceable commitment to purchase nominated dwellings in eligible residential projects located in NSW.
To satisfy the lender(s) pre-sale requirements, the NSW Government will commit to the purchase of up to 50% of the dwellings in qualifying residential projects.
To qualify for the program, developers will need to pass through the NSW Government’s credit assessment process that will consider the merits of the project and the capacity, capability and credibility of the developer and their delivery team.
The NSW Government’s commitment to acquire dwellings will be struck at a discount to each dwellings’ independently assessed market value on completion. The discount will be at a minimum of 10% of the market value, but the discount may be higher subject to the assessment of the project and the dwellings.
Subject to approvals, the NSW Government may commit to the purchase of:
- individual dwellings with a market value of up $2 million, and
- dwellings with an aggregate value of between $5–$50 million, or up to 50% of the number dwellings in a single residential project.
The Pre-sale Finance Guarantee application process will follow a typical construction finance application and credit assessment process, indicatively as follows:
- Planning and development approval of the project must be held and construction must be capable of commencement within 6-months of approval.
- If the developer’s lender(s) requires pre-sales in order for the developer to draw down on construction funding, the developer can apply for NSW Government support under the Pre-sale Finance Guarantee program.
- The NSW Government will undertake an assessment of the merits of the project and the capacity, capability and credibility of the developer and their delivery team.
- If indicatively approved, the NSW Government will negotiate the commitment terms with the developer, arguably the most important being which dwellings in the project will be acquired, and the pre-agreed price (discount to valuation) at which the NSW Government will purchase the dwellings.
- If the developer and their lender agree to the terms proposed, the commitment will be formally documented, legal agreements exchanged and the NSW Government’s obligation to purchase the dwellings formalised enabling construction to commence.
The NSW Government’s commitment to acquire dwellings will be renounceable by the developer, allowing the developer to on-sell dwellings to private purchasers at any time. Ultimately, the NSW Government expects that the dwellings will be on-sold to the private market prior to or at completion of the dwellings. If the developer is unable to on-sell the dwellings beforehand, the NSW Government will purchase these dwellings once built and ready for occupation.
Developers applying for Pre-sale Finance Guarantee support will be required to pay:
- an application fee, and
- if approved, a line fee calculated on the quantum of the NSW Government’s financial commitment to the project.
Next steps
The Department is working to stand up the Pre-sale Finance Guarantee with initial applications anticipated to be accepted from October 2025.
If you have further questions about the Pre-sale Finance Guarantee program, email [email protected]
Registrations of interest to participate in the program will be open in coming months.
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Frequently asked questions
During the Housing Accord period, NSW is expected to deliver 377,000 new homes.
The NSW Government has worked hard to reform the planning system, speed up assessment timeframes and streamline the approval process for Development Applications.
However, it has been demonstrated that commencement and completion rates are below historic levels and the levels required to satisfy demand.
With the private residential sector expected to deliver 90% of the homes during the Accord period, the NSW Government is addressing issues that are holding up the delivery of homes.
Developers’ ability to secure financing has been identified as one of the constraints on housing supply.
Homes are ready for construction, however without sufficient financing, they will not be built.
By providing a commitment to purchase dwellings off-the-plan in qualifying projects, the Pre-sale Finance Guarantee will bring projects that are development ready forward for construction.
The Pre-sale Finance Guarantee application process will follow a typical construction finance application process, indicatively as follows:
- Planning and development approval of the project must be held and construction must be capable of commencement within 6-months of approval.
- If the developer needs pre-sales to be able to commence their project, they can apply for NSW Government support under the Pre-sale Finance Guarantee program.
- The NSW Government will undertake a credit assessment on the merits of the project and the capacity, capability and credibility of the developer and their delivery team.
- If indicatively approved, the NSW Government will negotiate the terms with the developer, arguably the most important being which dwellings will be purchased, and what the pre-agreed price is.
- If the developer and their lender agree to the terms proposed, the commitment will be documented to formalise the NSW Government’s commitment enabling the pre-sale condition to be satisfied and construction to commence.
Yes. The NSW Government’s commitment to acquire dwellings will be renounceable, allowing the developer to on-sell dwellings to private purchasers.
If the NSW Government’s commitment to acquire a dwelling is renounced by the developer, subject to approval by their lender, the NSW Government’s commitment is extinguished and does not transfer to other dwellings being developed.
Ultimately, the NSW Government expects that the dwellings will be on-sold to the private market prior to or at completion of the dwellings. If the developer is unable to on-sell the dwellings, the NSW Government will purchase these dwellings once built and ready for occupation.
The Pre-sale Finance Guarantee program is proposed to be open to expressions of interest later this year with the first commitments expected to be issued late-2025.
Initial applications are anticipated to be accepted from October 2025.
This program is proposed to be open for applications for up to 5 years.
If dwellings are acquired as part of the Pre-sale Finance Guarantee program, the NSW Government will have the option to hold and rent the dwellings, or to re-sell them on the open market. A decision will be made subject to a range of factors including prevailing market conditions.
The Pre-sale Finance Guarantee commitment to an individual project will be between $5 million and a maximum of $50 million, capped at a maximum of 50% of the dwellings in the project.
The Pre-sale Finance Guarantee program has been developed to get more residential projects started sooner and deliver more residential dwellings faster. It has not been developed to transfer construction and residential market risk from the developer to the NSW Government.
The discount applied to the NSW Government’s commitment provides the developer with the incentive to continue to sell dwellings to private purchasers.
Yes. Fees will be charged to developers to access the Pre-sale Finance Guarantee.
There will be an application fee and then a line fee payable by the developer for the term of the NSW Government’s exposure.
A line fee is a charge levied for providing financial accommodation and is calculated at a pre-determined annual percentage rate against the NSW Government’s outstanding financial exposure.
NSW Government is not assuming any development risk with qualifying projects. If dwellings are not completed as required under the relevant agreements then the NSW Government will cancel the agreement.
Disclaimer: The information on this page is general in nature and subject to change.