$1b housing guarantee hailed as ‘game changer’ as Corrimal redevelopment kicks off
Illawarra builders tipped to benefit with presale rules support.
It has been hailed as a world-leading policy that will help speed up the delivery of new homes across New South Wales.
The state government’s $1 billion Pre-sale Finance Guarantee (PFG) is open for applications, with Minister for Planning and Public Spaces, and Member for Wollongong, Paul Scully, declaring it a “game changer” for developers struggling to meet strict bank pre-sale requirements.
The announcement landed as Legacy Property chief executive Matthew Hyder turned the first sod on The Works, a redevelopment of the former Corrimal Coke Works site that will deliver 550 new homes by 2027.
Hyder, whose company is leading the $700 million transformation in partnership with builder GrowthBuilt, applauded the new scheme, despite acknowledging that Legacy Property were unlikely to use the mechanism.
“This is government actually having a commercial look, a commercial strategy to how do you enable more housing across the state … it will be game-changing in some respects because some projects need the presales,” he said.
He admitted that for Legacy, presales across its projects remain strong, with all the one-bedroom properties on stage one of The Works already sold out.
But he added: “Sixteen years ago, when I was starting out, yes, a program like this would have been probably more relevant back then.”
$1 Billion to Unlock Housing
The PFG program is designed to remove one of the biggest barriers to construction: banks requiring 60–70 per cent of units sold off the plan before releasing finance.
Under the scheme, the state government will commit to buying up to 50 per cent of dwellings in approved projects, with support ranging from $5 million to $50 million per project. Homes will be valued at up to $2 million each, and the guarantee will operate as a revolving fund over five years.
Developers can rescind the government’s commitment as sales progress, freeing up funds for other projects. Or, if they fall short, the state will step in to purchase the remaining homes at a discounted rate.
Scully said, “We have more than 13,000 homes sitting there approved, but construction has not commenced. This is a bad outcome for our housing delivery, our economy and our communities. We’re checking capacity, credibility and capability. We want good quality homes from reputable builders, and we want them soon.”
Corrimal Coke Works Revitalisation
For Hyder, the sod-turning at The Works was the culmination of years of negotiation and site remediation. “This has been seven years in the making,” he said. “Literally, going back to 2018, we first started our conversations with the Illawarra Coking Coal company about the ideas behind revitalising this amazing site.”
Stage one will see four four-storey buildings and one five-storey building completed by early 2027.
Presales have been strong: “We’ve sold almost a third of stage one before GrowthBuilt even comes on site,” Hyder said.
“And 72 per cent of our buyers are from the Illawarra or from the local area, which is a real sign that people want to continue living here.”
While Legacy is unlikely to rely on the PFG for The Works, Hyder said the scheme would prove critical for other projects.
“We’ve already far eclipsed our requirements from our banks. But there could be a project in the future where we do. I have no doubt that there will be a lot of developers across the state who will take advantage of this program in order to get their construction started.”
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Shoring up the pipeline
Colliers Wollongong Managing Director Simon Kersten said the guarantee addresses a long-standing structural issue in project finance.
“A normal bank lender would want 60–70 per cent presales,” Kersten said.
“When the market’s a bit slower and a bit tighter, it’s very hard to sell all of those units before you’ve even started building. What the government’s saying is that we’ll commit to buy up to half of your projects at a discount … and if you get caught at the end and you haven’t been able to [sell], we will then come through and buy them so that the project doesn’t fail.”
Kersten said the scheme would be most valuable to small and medium developers who rely heavily on bank loans.
“The ones that need the pre-sales to move forward. The ones who are scared about the risk of putting their house on the line.”
Building Confidence in the Market
Both Hyder and Kersten stressed that beyond finance, the scheme could help shift market psychology in the Illawarra and beyond.
“When everyone’s saying the market’s not moving, interest rates are uncertain, household affordability [is tight], no one’s rushing out to buy anything, and it’s a self-perpetuating cycle,”
Kersten said. “The second that turns, it turns. So I think what this does is help start shifting the boulder, help start the momentum.”
Looking further ahead, Kersten said Scully’s reforms should be seen as part of a long-term framework. He framed them as “setting us up for the next 20–50 years.”
Hyder agreed the government was taking an unusually commercial approach. “Normally in your interaction with government, they’re not always the most commercial,” he said. “This is actually government saying, ‘Okay, there are commercial requirements that developers have to adhere to … how can we enable that?’ To me, that is really unusual. And I’ve got to take my hat off to the government.”
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