Developers across New South Wales can now apply for a groundbreaking initiative designed to accelerate the delivery of new housing in the state. The Minns Government has opened applications for the Pre-sale Finance Guarantee (PFG) program, a five-year scheme in which the state will commit to purchasing off-the-plan homes in approved residential projects, providing much-needed certainty for builders and financiers.

Under the scheme, the NSW Government can commit to buying up to 50 percent of homes off the plan in eligible developments, with each property valued at up to $2 million. Support will range from $5 million to $50 million per project, and up to $1 billion in pre-sales will be committed to over the life of the project through a revolving fund.

Developers participating in the program will have two options as homes are sold and projects are completed. They may rescind the commitments, freeing up funds to support other developments, or they can call on the guarantee, in which case the NSW Government will purchase the homes at a discounted rate, either to be rented out or released for sale.

The program directly addresses one of the industry’s biggest hurdles: meeting pre-sale requirements to secure finance, leading to delays in construction starts. In the past five years, the time between approval and commencement of new apartments has increased 39%, from 5.6 months to 7.8 months, with more than 13,000 approved projects yet to break ground.

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.

“This guarantee will give lenders greater confidence, reduce risk in the housing finance market and accelerate the delivery of new homes across NSW,” says Treasurer Daniel Mookhey. “This is about turning approvals into actual homes, supporting jobs, boosting housing supply and strengthening the state’s economy at the same time.”

Describing the program as a game changer, Minister for Planning and Public Spaces Paul Scully says, “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.”

According to Minister for Building Anoulack Chanthivong, Building Commission NSW was established 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,” Chanthivong notes.

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.

Image source: https://www.planning.nsw.gov.au/

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