The New South Wales government has unveiled steps within its latest budget aimed at significantly boosting housing supply across the state.
With a focus on accelerating construction, easing developer constraints and building a skilled workforce, the measures are designed to increase the number of homes available for both purchase and rent.
For buyers, the long-term outlook may be more promising, but the benefits will depend on how effectively the plans are rolled out.
Here’s a look at what’s in the budget:
Pre-sale Finance Guarantee
One of the most significant housing measures announced for this financial year is the state’s Pre-sale Finance Guarantee scheme. Under this, the government will act as guarantor for up to $1 billion in private sector housing projects, specifically low-to-medium density.
Currently, one of the key challenges faced by developers is the struggle to secure finance. This is because lenders typically require developers to pre-sell between 50 and 80% of dwellings in a project to qualify for loans. But pre-selling can be difficult, especially when consumer confidence is low, borrowing conditions are tight or the market is cooling.
Under the new scheme, the government will act as guarantor for up to 50 per cent of eligible off-the-plan housing projects, providing between $5 million and $50 million per development.
According to the government, this will support up to 5,000 apartments and unlock the potential to build 15,000 new homes over the next five years.
For buyers, this should result in more projects getting off the ground, more housing coming to market and, in time, less competition and better affordability.
Build-to-rent (BTR) tax break
In the budget, the government announced it was making the 50% land tax discount for BTR projects permanent. Previously, this was due to end in 2039. The aim is to encourage more developers to invest in long-term rental housing.
While these homes won’t be available to buyers, they are likely to help ease pressure on the overall property market by increasing rental supply and absorbing demand from renters who might otherwise be forced into the buyer pool.
Investment in skills and trades
To address the lack of skilled labour in the construction severe, the state has pledged $3.4 billion investment in TAFE and Skills funding, including an additional $1.2 billion over the next four years. This will include the training of 23,000 new construction workers.
More skilled workers will hopefully mean fewer delays and more homes built on time and on budget – another positive signal for buyers.
Housing Delivery Authority
Finally, the NSW government pledged to streamline delivery and planning processes through the Housing Delivery Authority. This includes fast-tracking assessments for 53,000 new homes.
By cutting red tape, reducing assessment times and coordinating planning across agencies, the Housing Delivery Authority aims to get homes built sooner and onto the market faster.
More choice for buyers
The state government’s steps designed to increase the supply of new homes are good news for buyers as it will increase choice, reduce competition and help ease the upward pressure on prices caused by the current imbalance between supply and demand.
While these changes will take time to flow through, buyers who are ready to act should consider speaking to a mortgage broker. A broker can help you understand your borrowing power, compare lenders and secure a loan that suits your needs, so you’re ready to move when the right property becomes available.
Ready to find a loan solution tailored to your needs and financial goals? Just Imagine Finance can help you. To discuss your options, contact us at catherine@justimaginefinance.com.au or on 0414 673 359.
