Construction on the long-dormant Balmain Leagues Club site in Sydney’s inner west is set to accelerate. The NSW government has stepped in with a pre-sale finance guarantee scheme, making developer Perifa Group the first beneficiary. This initiative aims to overcome pre-sale hurdles, speed up housing delivery, and boost the state’s housing supply.
KEY TAKEAWAYS
- The NSW government will guarantee pre-sales for up to 50% of off-the-plan homes in eligible projects.
- This scheme allows developers to secure funding faster, enabling projects like the Rozelle Village development to proceed.
- The Rozelle Village project will deliver 227 homes, including 59 affordable housing units.
- The government’s guarantee aims to reduce financial roadblocks and increase housing supply across NSW.
GOVERNMENT’S PRE-SALE FINANCE GUARANTEE
The NSW government has launched a $1 billion scheme to act as a guarantor for off-the-plan homes. This initiative is designed to help developers meet pre-sale requirements, which are often a significant hurdle in securing construction finance. By reducing the number of pre-sales needed before banks will lend, the government aims to expedite the construction of new housing.
ROZELLE VILLAGE DEVELOPMENT
Perifa Group’s $285 million Rozelle Village development, located on the former Balmain Leagues Club site on Victoria Road, is the first project to benefit from this scheme. The development will comprise 227 units, including 59 designated as affordable housing. Planning Minister Paul Scully stated that the guarantee provides certainty to developers and lenders, ultimately leading to more homes being built more quickly.
The project, approved last May, faced some local controversy regarding its height, with plans for towers between 14 and 16 storeys. The site has been vacant since 2010.
ACCELERATING HOUSING SUPPLY
The pre-sale finance guarantee allows developers to secure financing earlier, preventing projects from being stalled by the need to achieve high pre-sale percentages, typically around 80%. Perifa Group plans to use the scheme to facilitate the financing for the affordable housing component, while they work to secure a community housing provider for these units. The government has committed to purchasing these affordable units if pre-sale requirements are not met before completion, likely in 2028.
This initiative is part of a broader effort by the NSW government to address the state’s housing shortage. NSW is currently behind its target of building 377,000 new homes by mid-2029. The government expects to underwrite approximately 5,000 dwellings, which could enable the construction of 15,000 homes over five years.