Hundreds of new homes in Pyrmont and Westmead are set to start construction sooner thanks to a $1 billion government-backed pre-sale finance guarantee that gives developers certainty and removes lender risk.
The Minns Labor Government’s Pre-sale Finance Guarantee allows the state to commit to buying up to 50 per cent of homes in a residential development project if pre-sales fall short, with support ranging from $5 million to $50 million per project.
The program is already backing 38 of 280 apartments in Landream’s $900 million Pyrmont Place on Wattle Street, Pyrmont, and 13 of 30 apartments, including six affordable homes, in the Elodie development on Good Street, Westmead.
Treasurer Daniel Mookhey said the initiative was aimed at easing both housing and cost-of-living pressures.
“This is about using the NSW Budget to help the household budget,” he said. “In a dual cost of living and housing crisis, we are pulling every lever to support the delivery of desperately needed new homes. As demand for this program grows, we’re on track to support more building projects that create homes and economic opportunity right across NSW.”
Planning and Public Spaces Minister Paul Scully said the guarantee was breaking down barriers for developers.
“NSW needs new homes sooner. 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,” Mr Scully said.
Developers say the program provides the certainty needed to move forward; Chris Pratt, Head of Development NSW at Landream, said Pyrmont Place will deliver world-class residences within a mixed-use precinct, creating public amenities and hotel accommodation in the area.
“There has been strong demand for the development which is reflected in the pre-sales achieved to date. This, coupled with the NSW Government Pre-sale Finance Guarantee, will allow us to now accelerate the delivery of 285 new homes,” Pratt said.
Further, John Nehme, director of Gaby Group, said the Elodie project in Westmead benefited directly from the scheme.
“The Pre-sale Finance Guarantee has provided much-needed certainty, allowing us to move forward with confidence and accelerate the delivery of new homes in Westmead. Elodie represents our commitment to delivering well-designed, well-located affordable housing that supports the continued growth of the Parramatta and Westmead precinct,” Nehme said.
Since its launch in October, the Pre-sale Finance Guarantee has attracted 45 expressions of interest from developers, with one-third already invited to participate. To date, the program has accelerated construction of more than 540 homes, and further approvals could unlock over 130 homes in regional NSW.
The scheme forms part of a broader effort to speed up housing delivery, alongside landmark planning reforms, the NSW Housing Pattern Book, and the state’s largest-ever rezoning initiative.
The Pre-sale Finance Guarantee explained:
The NSW Pre-sale Finance Guarantee is a government-backed program designed to help developers secure construction finance and accelerate the delivery of new homes. It does this by reducing the risk that lenders face when financing residential developments.
Developers usually need to sell a portion of apartments “off the plan” before construction begins to convince banks to lend them money. This can be risky because:
- Pre-sales may be slower than expected.
- Buyers could pull out before settlement.
- Banks may hesitate to approve loans without sufficient sales.
The Pre-sale Finance Guarantee addresses these risks:
- Government Commitment: The NSW Government can commit to buying up to 50% of homes in a development if pre-sales are not enough. Each property can be valued up to $2 million.
- Financial Security for Lenders: By guaranteeing these pre-sales, the program removes lender risk, making banks more willing to lend developers the money needed to start construction.
- Accelerates Housing Delivery: Developers gain certainty and can begin building sooner, which means new homes reach the market faster.
- Scale and Scope: The program has a $1 billion revolving fund over five years. Support per project ranges from $5 million to $50 million, depending on need.