The NSW Government’s $1 billion Pre-sale Finance Guarantee (PFG) initiative has been hailed by the strata industry as a game-changer for housing supply, though questions are being asked about defects and public debt.

The program will underwrite up to 50 per cent of apartments sold off the plan in approved developments, allowing projects to proceed to construction more quickly by reducing one of the sector’s biggest obstacles to building apartment blocks: lenders’ demands for proven pre-sales before they will finance construction.

Strata Community Association (NSW) President Robert Anderson described the initiative as “a critical step in unlocking much-needed housing supply.”

“This directly addresses one of the greatest hurdles in getting apartments built—securing finance,” Mr Anderson said. “By guaranteeing pre-sales, the NSW Government is helping to bring thousands of new homes to market faster.”

The scheme targets some of the 13,000 approved but uncommenced apartment projects across NSW, with proponents saying it will boost housing supply, support construction jobs, and restore market confidence.

However, housing economists have raised concerns about the program’s design. Property analyst Cameron Murray warned that taxpayers could be left exposed if developments fail to sell or developers abandon projects.

“Who picks up the tab when pre-sales don’t convert to actual sales? This looks like privatised profits and socialised losses,” Murray said.

Consumer advocates have also questioned whether the scheme does enough to protect apartment buyers, particularly given recent high-profile building defects and developer insolvencies.

“We’ve seen too many cases where buyers are left holding the bag with defective buildings,” said Karen Stiles from the Owners Corporation Network. “A finance guarantee doesn’t guarantee building quality or developer accountability.”

The NSW Building Commissioner will assess projects before approval, which Mr Anderson called “an important safeguard to ensure that only credible developers and high-quality projects are supported.”

SCA (NSW) acknowledged the scheme would increase demand for professional strata management services and emphasised the need for ongoing reforms to strengthen industry standards and consumer protections.

The government has defended the program as essential to addressing the state’s housing crisis, with Housing Minister expected to announce full program details in coming weeks.