An artist’s impression of the planned Rozelle Village, which has received support from a new finance program.
The Minns Government has pulled the trigger on a $1 billion war chest to smash through construction gridlock, starting with a new project in the inner west.
The redevelopment in Rozelle has received the first guarantee under the government’s Pre-sale Finance Guarantee program.
The program aims to fast track new homes by underwriting some of the pre-sales in eligible projects, helping developers secure finance for their projects sooner.
Through the program, more than 225 new apartments will start construction sooner as part of the $285 million Rozelle Village revamp of the former Balmain Leagues Club site on Victoria Rd.
The redevelopment of the derelict site received state significant development approval last year under the Infill Affordable Housing pathway.
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Work has started on the Balmain Leagues club redevelopment. Picture: Sam Ruttyn
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The mixed-use precinct also includes retail spaces, community facilities, and a public plaza.
A government media release revealed the guarantee is supporting 32 affordable homes off the plan, helping developer PERIFA secure construction finance and deliver homes in the inner west.
Property Council NSW executive director Anita Hugo said the first deal showed the guarantee can cut through one of the biggest blockers to apartment construction – the pre-sale hurdle that keeps projects stalled even after planning approval.
“Finance has been one of the biggest barriers holding back otherwise viable projects. Our research with Savills found that developers with approvals, demand and delivery partners still couldn’t get projects off the ground because pre-sale hurdles had become unworkable,” Ms Hugo said.
“Getting the settings right on finance is just as important as getting the planning right. This guarantee is one of the clearest examples of government using its balance sheet to unlock private delivery.”
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NSW Treasurer Daniel Mookhey said the program would help solve a critical housing construction issue. Picture: Nikki Short
In addition to the Rozelle Village project, over $100 million worth of pre-sale commitment requests have been received and are currently under assessment.
If approved, this support will unlock the construction of over 350 new homes across metropolitan Sydney and regional NSW.
Under the Pre-sale Finance Guarantee, the Government may commit to buy, off the plan, up to 50 per cent of homes in approved developments, valued at up to $2 million each.
Support can range from $5 million to $50 million per project, the guarantee then allows developers to achieve commercial construction finance.
Up to $1 billion in pre-sales over the next five years will be supported through the revolving fund, making sure more projects can move from approval to construction.
The challenge of meeting pre-sale requirements is one of the most common issues cited by stakeholders in securing finance, and has been outlined as a key hurdle for industry.
Only developers and projects that meet strict criteria for credibility, capability, and capacity to deliver are approved and invited to participate in the program.
Treasurer Daniel Mookhey explained the scheme was a “smart use of the State’s balance sheet”.
“By providing a targeted pre-sale guarantee, we’re giving the market the confidence it needs to secure finance and start construction, without the government having to spend a dollar upfront,” he said.
Rozelle Village has been deemed a state significant project.
Minister for Planning and Public Spaces Paul Scully said: “By removing planning and financial roadblocks, we’re giving developers and lenders certainty, boosting housing supply, and creating vibrant communities where people want to live which means more people in more new homes quicker.”
PERIFA group managing director Fabrizio Perilli said the Rozelle Village project would ensure “long-term social impact and community benefit”.
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