The Minns Labor Government has opened Expressions of Interest for its landmark Pre-sale Finance Guarantee (PFG) program a $1 billion revolving fund designed to unstick housing projects languishing between approval and construction.

Announced on 22 September 2025, the program is being pitched as a world-first approach to a problem that has plagued developers and builders alike: pre-sales. With more than 13,000 approved dwellings sitting dormant in NSW and the average lag between approval and construction stretching to almost eight months, policymakers are betting that government-backed pre-sales will unlock finance, reduce risk, and accelerate delivery.

How the Guarantee Works

At its core, the PFG is a five-year initiative where the NSW Government commits to purchasing up to 50 per cent of homes off-the-plan in approved projects.

• Support ranges from $5 million to $50 million per project.
• Eligible dwellings are valued at up to $2 million each.
• Developers can rescind the guarantee once genuine buyers are secured, freeing up funds for the next project.
• If sales fail to materialise, the state will step in and purchase the dwellings at a discounted rate, later renting or selling them into the market.

Treasurer Daniel Mookhey described the scheme as “about turning approvals into actual homes, supporting jobs, boosting housing supply and strengthening the state’s economy.”

The Industry Bottleneck

While planning reform has been front and centre for much of 2024 and 2025, the harder problem has always been getting shovels in the ground.

Developers frequently cite pre-sale hurdles as their biggest roadblock to securing finance. Banks require a critical mass of committed buyers before they release funding, an increasingly difficult task in a market where interest rates, affordability concerns, and buyer hesitation collide.

According to the NSW Productivity and Equality Commission, this pre-sale barrier is now one of the single largest contributors to housing delivery delays.

In fact, the time between approval and commencement for new apartments has blown out by 39 per cent in five years, up from 5.6 months to 7.8 months.

Safeguards on Quality

The government has made it clear this is not a blank cheque.

The NSW Building Commissioner will oversee assessments, ensuring only developers and builders with a track record of capability, credibility and capacity are approved. That means:

• Projects must be ready to build within six months.
• Applicants must already have planning approval and at least indicative finance arrangements.
• Builders must meet strict quality and compliance benchmarks.

Minister for Building Anoulack Chanthivong said the program won’t come at the expense of consumer confidence:

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

Support from Finance

Perhaps the strongest endorsement has come from the banking sector. NAB’s Group Executive for Corporate and Institutional Banking, Cathryn Carver, called the initiative “exactly what’s needed to provide access to housing, let alone keep home ownership within reach.”

With lenders under pressure to manage risk in an uncertain market, government-backed pre-sales could prove to be the bridge between cautious finance and desperate housing demand.

Game Changer or Safety Net?

Planning Minister Paul Scully went further, calling the scheme a “game changer”:

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

The PFG aims to change that by removing pre-sales as a bottleneck, unlocking construction jobs, and strengthening developer pipelines.

But questions remain:

• Will government-backed pre-sales skew developer incentives, encouraging reliance on state guarantees instead of genuine market pre-sales?
• How will the government manage the resale or rental of dwellings it ends up purchasing, particularly in softer markets?
• Could the program tilt the playing field toward larger developers who can scale projects above the $5 million entry point?
  

What Builders Should Know

For builders, the key upside is obvious: more approved projects moving into construction means more work, sooner.

However, with the Building Commissioner embedded in the eligibility process, only builders with a strong compliance history will be in the mix. This could accelerate a broader industry shift toward higher standards, locking out players with poor records.

Builders should also note that the program indirectly reduces settlement risk. With the government acting as a buyer of last resort, the chances of projects stalling mid-construction shrink dramatically, a win for trades and suppliers who often bear the brunt of collapses.

The Bigger Picture

The PFG program is part of a suite of reforms introduced by the Minns Government, including:

• Planning System Reforms Bill 2025 to modernise the state’s planning framework.
• Fast-tracked assessment pathways for key housing projects.
• A focus on productivity and equality, following recommendations from the Productivity Commission review.

Together, these reforms are being framed as the state’s best shot at lifting housing supply at scale.

Expressions of Interest Now Open

Developers are now being invited to submit EOIs. To qualify, projects must:

• Be shovel-ready within six months.
• Already hold planning approval.
• Demonstrate credible finance arrangements.

If successful, applicants could secure government-backed pre-sales worth tens of millions removing one of the industry’s biggest financial hurdles.

Verdict: Cautious Optimism

The Pre-sale Finance Guarantee represents a bold intervention in NSW’s housing market. It squarely targets the space where so many projects get stuck: between approval and funding.

For builders, it could mean a surge in new work and a stabilisation of risk. For lenders, a safety net that encourages more aggressive project finance. For government, a chance to deliver on housing supply targets while keeping quality controls intact.

The challenge will be execution. If poorly managed, the scheme could leave taxpayers holding a portfolio of unsold apartments. But if it works as designed, it may prove to be the missing link between approval and delivery turning policy ambition into actual homes on the ground.

Author: TGB Editorial