How the New South Wales government is adopting new approaches to address housing shortages across the state and in Australia’s largest city.
The New South Wales Government is thinking outside the box for housing policy, moving beyond conventional approaches in recent history. The state has ambitious housing targets stemming from the Federal Government’s National Housing Accord target of 1.2 million new homes by 2030, which has just passed one year since its implementation in July 2024. The NSW target is to deliver 75,000 new homes annually till 2030, requiring the biggest residential construction effort in the last 20 years.
From January to March 2025, developers completed 49,300 dwellings according to the ABS. Over the last five years, since March 2020, annual completions have averaged 51,500 dwellings (Figure 1). To hit the 75,000 target, completions must increase by 46%, which is no small feat. During the five-year period between March 2020 and March 2025, annual completions averaged 66,900 dwellings, meaning construction still needs to scale up by an additional 12% to meet these ambitious targets.
Figure 1: Rolling Annual Number of New Dwelling Units in New South Wales
Source: Australian Bureau of Statistics (ABS)
This has been no secret. As part of the state’s 2025/26 budget announcement in June, the government unveiled a multi-faceted housing policy to address the crisis across multiple fronts. At its core is the innovative $1 billion Pre-Sale Finance Guarantee programme, forming a key component of a comprehensive strategy. The Australian-first initiative positions the government as guarantor for up to 50% of pre-sales in approved residential projects. This approach helps developers secure construction finance for projects facing feasibility challenges. The guarantee is renounceable, creating a true safety net rather than a first-option purchase arrangement, a win-win for everyone.
Alongside this initiative, the budget included investment in other programmes. These included TAFE training to deliver 4,600 more workers into construction trades, accelerating planning processes, funding for the newly established Housing Delivery Authority, support for Building Commission NSW to improve construction quality, and infrastructure support to regional councils. The budget also confirmed the permanency of the 50% land tax reduction for qualifying build-to-rent housing, completing the policy ecosystem.
In July, the government announced the NSW Housing Pattern Book with a complying development pathway, which represents a significant innovation in planning reform. This initiative offers pre-approved, architect-designed home patterns suited for modern urban living and if used, it provides access to a streamlined ten-day approval pathway. This brings immediate savings on custom architectural plans and creates potential for economies of scale in construction.
On paper, these initiatives should bolster the housing pipeline: more labour, accelerated planning processes, higher quality construction, infrastructure to support growth, and some incentives. These elements create a recipe for success, especially alongside the Low and Mid-Rise Housing Policy implemented earlier in 2025. A question remains; will the construction sector have the capacity to deliver 75,000 dwellings annually? It won’t quite require a miracle, however, it will require everyone to work together. The sector must take advantage of these changes to deliver the housing New South Wales needs. These measures provide genuine cause for optimism.