New South Wales Budget Takes Bold Steps on Housing

The 2025–2026 New South Wales Budget has made it clear that getting more homes built is a top priority. In a move that could unlock thousands of new dwellings, the government is stepping in to back developers who are ready to build but are stuck waiting for finance. It’s a bold strategy, and it could be a real game-changer for the state’s housing market.

A helping hand for developers

One of the biggest hurdles developers face is meeting pre-sale targets before they can get funding. Banks want to see a certain number of units sold upfront, but that’s often easier said than done, with some projects getting delayed for months, sometimes years, waiting for enough buyers to sign on the dotted line.

To break that cycle, the NSW government is launching the Pre-Sale Finance Guarantee. It’s the first of its kind in Australia. The government will act as a guarantor for up to 50% of the required pre-sales on approved housing developments. That backing should make it much easier for developers to get the finance they need to start building.

Each project can receive between $5 million and $50 million in support, depending on its size. The government will cap the total at $1 billion worth of guarantees at any one time, but once homes are built and sold, that money becomes available again for new projects. It’s a revolving fund that’s designed to keep construction moving.

What’s the catch?

Developers will still need to have planning approval and some early sales in place before they apply. They’ll also be assessed on their track record and ability to deliver. Once a guarantee is in place, construction has to start within six months so there’s no sitting on the land and waiting.

If the worst happens and some homes don’t sell, that’s where the guarantee kicks in. The government will buy any unsold properties at a discounted rate, with the option to rent them out or use them for social or affordable housing. So even if the market doesn’t cooperate, those homes won’t go to waste.

Pushing for innovation

The Budget isn’t just about finance. There’s also a strong focus on shaking up the way homes are built. The government is putting $20 million towards turning new technologies into real-world solutions, especially in housing and energy. Another $4 million is going into initiatives that promote smarter construction methods, through programs like the Housing Innovation Network.

This kind of investment in innovation could make a real difference, helping builders reduce costs, speed up delivery and improve quality. It’s a long-term plan that complements the more immediate impact of the finance guarantee.

AI steps into the planning process

Anyone who’s ever dealt with local councils knows the development approval process can be painfully slow. But that might be about to change, with AI technology starting to enter the mix.

Wingecarribee Shire Council has just rolled out a new AI tool, DAISY, to help speed up application assessments. It’s in its infancy, but 20 councils are already looking to adopt similar systems. If it works, it could help cut down the red tape that slows everything down, from single homes to larger-scale developments.

A budget with housing at its heart

Despite a projected deficit of $3.43 billion next financial year, the state government is clearly putting its weight behind housing. Developers also got some other wins in the Budget, including the option to build infrastructure themselves (rather than paying a levy) and a permanent 50% land tax discount for build-to-rent projects.

The New South Wales budget is tight and there are cuts in other areas to help balance the books, but housing has been placed front and centre. That’s exactly where it needs to be if NSW wants to meet its housing targets and ease the pressure on renters and first-home buyers.

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