Is the NSW government about to become your landlord? Not quite.
Since late 2025 the state has been promising to buy unsold off-the-plan apartments from developers. It sounds like the government is about to own a slice of every new block. The reality is narrower, and the effect on rents and prices will be slow. Here’s how it works.
A promise to buy, designed never to be used.
The program is the $1 billion Pre-sale Finance Guarantee, announced in the June 2025 state Budget and open since October 2025. Banks won’t release construction finance until a developer has pre-sold 50% to 80% of a project. In a slow market that leaves approved buildings sitting idle: more than 13,000 approved homes in NSW had not started. So the government steps in as a buyer of last resort.
The developer applies
The project must have approval, a bank term sheet that needs pre-sales, and be able to start within six months.
The state commits to buy
Up to 50% of the apartments in larger projects, or 75% in projects under 20 homes. Each home is valued at up to $2 million, or $2.5 million for three bedrooms.
The bank lends, the developer sells
The developer can sell those apartments to private buyers at any time, at full price. Each sale cancels part of the government’s commitment.
Only the unsold ones
Anything still unsold at completion, the state buys at a discount of at least 10% to its valuation. It pays no deposit along the way.
Source: NSW Department of Planning, Housing and Infrastructure. Developers pay an application fee, an establishment fee and a line fee of 1% to 1.5% a year on the outstanding commitment.
Nine projects, one in the east.
By mid-October the government said the scheme had helped bring forward almost 1,300 homes. The commitments so far sit mostly in the inner west, Parramatta and Rhodes. The only Eastern Suburbs project is a 21-apartment block in Kingsford.
Source: DPHI performance table, 21 July 2026. Moorebank and Kingsford were added in October; their commitment values haven’t been published.
| Project | Backed | Affordable | Due |
|---|---|---|---|
| Mason, 15–17 Strachan Street, KingsfordAdvent Property Group · $32.4m · 21 apartments · 350 m from Juniors light rail | 10 of 21 | 4 | Mid 2029 |
The $2 million price cap rules out most new apartments in Bondi Junction, Double Bay or Rose Bay. The scheme suits Kingsford, Maroubra and Randwick-style mid-market projects.
Three ways a guaranteed unit can end up.
The government’s own page says it expects the apartments to be sold privately before or at completion. If it does have to settle, it can hold and rent them or resell them. It doesn’t say they’ll become social housing, and no agency has been named to manage them. Choose a path.
A private buyer settles
This is what the scheme is built for. The guarantee gets the bank to lend, construction starts, and the developer keeps selling through the build. Every private sale cancels part of the commitment, and the fund is recycled into the next project.
For the market it means one thing: more apartments completing in 2028 and 2029 than would otherwise have been built.
The government holds and rents
The government becomes a landlord for those units, letting them on the open market or using them as affordable housing. The June 2025 Budget said unsold homes could be rented, sold, or converted to affordable or social housing.
Even in the worst case the numbers are small. A few hundred state-owned rentals across Sydney would barely register against a rental market of more than 700,000 homes.
The government resells
The state can sell the apartments back into the market when conditions suit, recovering its money and the discount. That’s why Treasury calls it a revolving fund rather than a spending program.
The risk for neighbours is a government seller with no mortgage and no hurry. The discount gives it room to undercut, but also no reason to dump.
Sources: DPHI program page; NSW Government ministerial releases, September 2025 and October 2026. Separately, Homes NSW has bought whole buildings off the plan for social housing, and Landcom is building 400 essential-worker rentals. Those are different programs.
The effect is real, but small and slow.
Projects backed in 2026 complete in 2028 and 2029. That’s when any relief for renters arrives, and it lands where the projects are. Research on Sydney’s last apartment boom found that areas with more new supply saw modestly lower price growth, so the direction is clear. The scale is the question.
Homes over five years
Against a Sydney rental vacancy rate of 1.8% and a shortfall the Tenants’ Union puts in the hundreds of thousands, it helps at the margin.
A floor, not a threat
The discount only applies if the developer fails to sell. It gives developers every reason to keep selling privately at full price, which is what the government wants.
The earliest completions
Rozelle Village started in early 2026. Kingsford is due mid 2029. Nothing from this scheme reaches the rental market before then.
Industry says finance, not planning, is now the main blocker. The Property Council’s Katie Stevenson warned that too many projects have approval but aren’t financially viable, and called the scheme a practical fix. South Australia and Western Australia have since copied it.
Critics say the state is underwriting apartments people can’t afford, at market rents, without adding genuinely affordable homes. The Tenants’ Union argued the scale was too small to matter and that the money would do more as social housing.
I’ve watched governments try to kick-start apartment supply for over 35 years, and this one is cleverer than most. It costs the state almost nothing unless the market collapses, and it puts the discount risk on the developer, not the taxpayer. That’s why nine projects have signed up and none have called on it.
For the Eastern Suburbs the direct impact is close to zero. The $2 million cap means it won’t touch Bondi Junction, Double Bay or anything on the harbour. Where it matters is the south-east: Kingsford, Kensington, Maroubra, around the light rail. Combined with the Bondi Junction Master Plan and the Woollahra and Edgecliff rezoning, mid-priced apartment supply in the east is going to rise over the next five years. If you own an older unit in those suburbs, that’s the long-term pressure point, and it’s a reason to keep your building well maintained and your strata in order. Prestige homes and houses are unaffected.
Read factors affecting property prices besides interest rates.
Own an apartment in the east? Know what’s coming.
I’ll tell you what new supply near you means for your value, and when it’s smart to sell. See how I sell apartments in the Eastern Suburbs.
35+ years in Sydney’s Eastern Suburbs
- NSW Department of Planning, Housing and Infrastructure: Pre-sale Finance Guarantee program page and performance table, 21 July 2026.
- NSW Government ministerial releases: 22 September 2025, 6 April 2026, 17 June 2026 (expansion) and 16 October 2026.
- ABC News, NSW Budget 2025–26; JLL Residential Insights, June 2025; Property Council of Australia; Tenants’ Union of NSW.
- The Urban Developer, 19 October 2026; The Good Builder; Apartments.com.au (15–17 Strachan Street, Kingsford).
- e61 Institute, When housing supply hits the market, June 2026; SQM Research vacancy data.
- Homes NSW / DCJ, March 2024; Landcom essential worker housing program.
Includes Alan Weiss’s personal views. Program terms may change. General information only, not financial or legal advice. Alan Weiss is a licensed real estate agent.