300 New Homes Bankrolled Under Minn’s Labor Government’s Innovative New Scheme

The Minn’s Labour Government’s $1 Million Australia-first scheme is set to bankroll the construction of another 300 new homes in Pyrmont and Westmead in the coming year.

The scheme will finance 38 of 280 new apartments in a new $900 million luxury waterfront project, Pyrmont; as well as almost half of the new apartments in Westmead’s upcoming Elodie development, including six affordable homes.

The so-called “Pre-sale Finance Guarantee”, instituted in September last year, allows the government to purchase up to 50% of the off-the plan dwellings of approved development projects. The scheme guarantees projects that have otherwise stalled, be it due to low presales or perceived lender risk, the necessary capital to commence building.

In a joint statement this morning, New South Wales Treasurer Daniel Mookhey and Minister for Planning and Public Spaces Paul Scully lauded the program’s success in expediting the construction of new homes. 

“Since launching in October, the Pre-sale Finance Guarantee has gained extraordinary traction from industry, with 45 expressions of interest already received from developers across the state – one third of which have already been invited to participate. It is also being adopted by other states.”

In order to “keep this momentum building”, the Government has appointed Australian property investment executives Deb Coakley and Tim Hallam as chairs of the Pre-sale Finance Guarantee Advisory Committee. The pair will assist in reviewing future applications made under the scheme.

While the Treasurer has argued the scheme is all about using the “NSW Budget to help the household budget”, some question whether the scheme has done anything to ease the financial pressures of the housing crisis for ordinary Australians.

In conversation with Broker Daily, managing director of brokerage Simplicity Loans and Advisory, Jean-Pierre Gortan, argued that the benefits of the scheme, while well-intentioned, are largely limited to projects that are already viable, well-located, and directed at premium, inner-city markets.

“The drawback is that it is unlikely to bring a meaningful number of additional projects to market or materially address the housing shortage. In many cases, the guarantee will support projects that would likely proceed anyway, rather than unlocking developments that are currently unviable due to broader structural issues.

“Until these structural issues are addressed, government guarantees – while helpful at the margin – are unlikely to materially increase housing supply or resolve the broader housing crisis.”