Expressions of Interest (EOI) are now open for the NSW Government’s world-leading Pre-sale Finance Guarantee program (PFG).

From today, eligible applicants can apply to have the NSW Government commit to purchasing off-the-plan dwellings in eligible residential developments to help secure finance and bring construction forward on much-needed housing across NSW.

The State Government has introduced a range of reforms to increase the number of homes entering the system and speed up assessment timeframes, but getting homes built is the next big challenge.

Under the five-year initiative, the Government will leverage its strong fiscal position to commit to buy up to 50 per cent of homes off the plan in approved NSW housing projects.

Eligible homes will be valued at up to $2 million each, with support ranging from $5 million to $50 million per project.

Up to $1 billion in pre-sales will be committed over the life of the project through the use of a revolving fund.

As homes are sold and projects are completed, builders will have the option to:

• Rescind the commitments, releasing the funds and allowing the program to bring more homes forward for construction, or,
• Call on the Guarantee, where the homes are then purchased by the NSW Government at a discounted rate and either rented, or sold into the market.

The challenge of meeting pre-sale requirements is one of the most common issues cited by stakeholders in securing finance, and has been outlined as a key hurdle for industry in the NSW Productivity and Equality Commission’s Review of housing supply challenges and policy options for New South Wales.

In the past five years, the time between approval and commencement of new apartments has increased 39 per cent, from 5.6 months to 7.8 months, and in NSW, there are more than 13,000 developments approved but not commenced.

This landmark program will not only shorten the time between approval and construction but also reduce risk in the residential construction finance sector, giving lenders and homebuyers greater certainty. 

The NSW Building Commissioner will also be engaged as part of the program’s application assessment process, so only developers, builders and their projects that meet capability, credibility and capacity benchmarks are supported.

Developers are now invited to submit an Expression of Interest to join the program. Applicants who have planning and indicative or binding finance approvals and are ready to build within six months will be initially assessed to determine if they and their projects are eligible to participate in the program.

To submit your Expression of Interest, visit Pre-sale Finance Guarantee | Planning

Treasurer Daniel Mookhey said, “This guarantee will give lenders greater confidence, reduce risk in the housing finance market and accelerate the delivery of new homes across NSW.

“This is about turning approvals into actual homes, supporting jobs, boosting housing supply and strengthening the state’s economy at the same time.”

Minister for Planning and Public Spaces Paul Scully said, “This is a game changer. This will bring forward the construction of homes, offer greater certainty for our building industry and reduce the level of risk in the financing sector. 

“We have more than 13,000 homes sitting there approved but construction has not commenced. This is bad outcome for our housing delivery, our economy and our communities. 

“We’re checking capacity, credibility and capability, we want good quality homes from reputable builders, and we want them soon.”

Minister for Building Anoulack Chanthivong said, “We established Building Commission NSW as a dedicated building regulator to restore confidence in the residential construction sector. 

“As the Pre-sale Finance Guarantee supports delivering the homes our state desperately needs, the Building Commission NSW will be doing all it can to make sure those homes are well-built by trusted professionals.

“The Minns Labor Government won’t be sacrificing quality for quantity as we get our housing supply back on track.”

NAB Group Executive, Corporate and Institutional Banking Cathryn Carver said, “This initiative will provide certainty for developers and get more houses built in NSW – which is exactly what’s needed to provide access to housing, let alone keep home ownership within reach. NAB is proud to contribute to innovative solutions that contribute to housing supply, helping more Australians achieve their home ownership goals.”