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 purchasing off-the-plan dwellings in eligible residential developments to help developers secure finance lenders’ approval and commence construction sooner.
A growing number of residential projects with development approval are unable to proceed to construction due to a shortfall in the pre-sales required to satisfy lenders' pre-conditions for funding.
The NSW Government’s strong credit standing will provide financial institutions with the confidence they need to lend and get residential projects underway.
By committing $1 billion to the program, the NSW Government will satisfy lender pre-sale requirements on eligible projects, ensuring more homes can be delivered faster.
The program aims to fast-track the delivery of thousands of new homes over the next 5 years, support the creation of thousands of direct and indirect jobs, and help attract talent and develop skills 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 in NSW.
To satisfy the lender(s) pre-sale requirements, the NSW Government will commit to the purchase of up to 50 per cent of dwellings in qualifying residential projects.
To qualify for the program, developers will need to pass through the NSW Government’s application 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 at a discount to each dwelling’s 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 to $2 million
- dwellings with an aggregate value of between $5 - $50 million, capped at a maximum of 50% of the number of 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 must be held and construction must be capable of commencement within 6 months of approval.
- If the developer’s lender(s) requires pre-sales 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 assess 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 commitment terms with the developer, including 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 at full market price.
Ultimately, the NSW Government expects that 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 (submission) fee
- an establishment fee
- if approved, a line fee calculated on the quantum of the NSW Government’s financial commitment to the project.
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, commencement and completion rates are below 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. Many homes have planning approval and are ready for construction, however, without sufficient finance, they will not be built.
By providing a commitment to purchase dwellings off-the-plan in qualifying projects, the Pre-sale Finance Guarantee will help unlock finance lenders' approvals to 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:
- 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 assess the merits of the project and the capacity, capability and credibility of the developer and their delivery team.
- If approved, the NSW Government will determine 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.
- It is expected that construction will begin within 6 months of acceptance into the program.
No. The Government will not pay a deposit for the dwelling(s) it is committing to purchase. Part of the approval and legal documentation process will involve ensuring the developer’s lender is comfortable the NSW Government’s pre-commitment satisfies their pre-sale requirement.
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 Government’s commitment is extinguished and does not transfer to other dwellings being developed.
Ultimately, the NSW Government expects 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 Government will purchase these dwellings once built and ready for occupation.
No. Any commitment to pre-sales under the Pre-sale Finance Guarantee program is not an indication the NSW Government is backing or partnering in the development.
Although due diligence is undertaken on projects and developers, the purchase commitment of dwellings in a project off-the-plan does not mean the NSW Government is endorsing, guaranteeing, or providing a warranty in relation to the quality, delivery or financial outcome of the development.
To avoid any misinterpretation, the developer, or anyone acting on their behalf, is not permitted to disclose to potential purchasers, or in any sales and marketing material, that the property is part of the Pre-sale Finance Guarantee program.
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.
Yes. The maximum value per dwelling that the Government can commit to is $2 million, based on the Government’s valuation of the property. This value has been determined because the aim of the program is to increase the supply of mid-range and affordable homes across NSW.
If a project does not have any properties valued at, or below, $2 million, it will not qualify for the program. The project must have a sufficient number of dwellings valued under $2 million to meet the minimum and maximum commitment limits.
No. The NSW Government will engage Value NSW to complete a valuation of dwellings proposed to be subject to pre-commitments under the Pre-sale Finance Guarantee program. The values generated by Value NSW may differ from the list prices. In these cases, the developer will be presented with values generated and has the right not to accept the Government’s support and withdraw the application.
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 a one-off application fee (submission fee) to cover the costs of assessment and valuation; a one-off establishment fee payable on acceptance of the offer, and; an ongoing line fee payable monthly by the developer for the term of the NSW Government’s exposure.
A line fee is a charge levied for the pre-sale commitment and is calculated at a pre-determined annual percentage rate against the NSW Government’s outstanding financial exposure.
All fees and charges will be published prior to opening the program to applications and will be detailed in the NSW Government’s offer if approval to support a project is obtained.
The NSW Government is not assuming any development risk in qualifying projects. If dwellings are not completed as required under the relevant agreements, then the NSW Government will cancel the agreement subject to the conditions enabling this being met.
Next steps
Initial applications for the Pre-sale Finance Guarantee program are expected 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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Disclaimer: The information on this page is general in nature and subject to change.