In Brief
Key Budget measures secured through Property Council advocacy include:
Tax and Finance
- A new Pre-Sale Finance Guarantee, with the Government to act as guarantor on up to 50% of pre-sales for eligible residential projects—supporting up to $1 billion in housing delivery through a revolving fund.
- A permanent 50% land tax concession for eligible Build-to-rent housing, removing the previous 2039 sunset and improving investor certainty.
Infrastructure and Transport
- New Works-in-kind guidelines to accelerate infrastructure delivery to unlock housing supply.
- Over $150 million in additional funding for Western Sydney Aerotropolis roads and water infrastructure.
- $452 million investment in bus services, including for growth areas in Western Sydney, the Hunter, Illawarra and Central Coast.
- $7.6 million to continue the Government’s Land Audit, which has identified over 8,200 potential homes to date that could be delivered on surplus government land.
Improving Government Processes
- $17.7 million to establish a new Investment Delivery Authority to fast-track major non-residential projects including data centres, hotels and logistics projects to support up to $50 billion in private investment annually.
- $145 million in new funding for Building Commission NSW to improve construction quality and compliance.
- $122 million in additional planning reform funding, including:
- $83.4 million to speed up planning approvals
- $10.6 million to support the Housing Delivery Authority
- $20.9 million to help regional councils bring forward enabling infrastructure.
Innovation and Productivity
- A $79.2 million package to support the NSW Innovation Blueprint, including $38.5 million for Tech Central, $20 million for emerging technologies in housing and energy, and $4 million to establish the Housing Innovation Network and Housing Construction Program to connect researchers, start-ups and industry and promote new technologies that speed up housing construction.
- A Global Investment Summit to be held in Sydney this October, to position NSW as the investment capital of the Asia-Pacific and showcase the state’s economic strengths.
- $27.3 million to establish the Future Jobs and Investment Authority, with access to $100 million to support economic transition in coal-reliant regions.
Workforce
- $40.2 million for 23,000 fee-free construction apprenticeships and $13.8 million to upskill 4,800 workers through a Construction Workforce Package.
In-depth
1. NSW Executive Director’s Overview
Earlier today, NSW Treasurer Daniel Mookhey delivered his third State Budget, setting out the Government’s economic and fiscal priorities for 2025–26. Again this year, housing remains firmly in focus for the NSW Government.
This is a Budget that listens. It responds directly to many of the priorities the Property Council has championed, from unlocking stalled housing projects to fast-tracking approvals and supporting a skilled construction workforce. While there is more to do, this is a meaningful step toward unblocking the remaining obstacles to the delivery of housing and other development.
The standout announcement is the introduction of a Pre-Sale Finance Guarantee – a $1 billion scheme that will see the Government act as guarantor for up to 50% of pre-sales on eligible housing projects.
It’s a breakthrough that removes one of the biggest barriers to getting new homes out of the ground, and a direct result of our sustained advocacy and collaboration with government, including last year’s Ministerial Roundtable with the Australian Banking Association and our ‘Release the Pressure’ feasibility research series with Savills.
Many of the key measures were foreshadowed in the leadup to today’s budget. They include a permanent land tax concession for Build-to-rent, a new Investment Delivery Authority, and continued support for skills, construction quality and precinct innovation.
Alongside that, we’ve seen significant investments in vital enabling infrastructure, including an additional $150 million for Western Sydney Aerotropolis roads and $644 million for water infrastructure in the Mamre Road precinct. This welcome investment is crucial to support the delivery of these precincts that are vital to the NSW economy.
The Budget also invests in the systems that support delivery – with $17.7 million for a new Investment Delivery Authority to support investment in data centres, hotels and logistics developments, $145 million for Building Commission NSW, and more than $120 million in planning reform funding to further speed up assessments and strengthen council capability.
On the workforce front, the Government has committed $40.2 million for 23,000 fee-free construction apprenticeships and $13.8 million to help transition more workers into residential construction – a tangible response to our calls for a bolstered workforce to meet growing demand.
There’s also a forward-looking push on innovation and productivity, with $79 million to deliver the NSW Innovation Blueprint, including $20 million for emerging housing technologies and $4 million for the new Housing Innovation Network and Housing Construction Program to promote new technologies to speed up residential construction.
In regions like the Hunter and Illawarra, the Future Jobs and Investment Authority, backed by $27.3 million and access to $100 million in funding, marks a welcome commitment to long-term planning and post-coal transition.
Still, the task ahead is significant. While this Budget tackles some of the biggest constraints on delivery that we have been highlighting, housing feasibility remains under pressure. Developer contributions, uncertainty and holding costs continue to weigh down project viability.
This is not just a housing challenge – it’s a productivity challenge. Every project delayed by feasibility gaps or duplicated processes is a missed opportunity for homes, jobs and growth. To build the projects NSW needs, we must stay focused on system performance, affordability and speed.
The Government has put delivery at the centre of this Budget. It’s now about using the tools – finance, planning reform, workforce and infrastructure – decisively and in partnership with industry to get housing and other important projects moving.
Of course, there is still more to do. We’ll continue to unpack the detail and work closely with Government to keep the momentum going and find solutions to the remaining challenges facing our industry.
2. Economic and Fiscal Overview
The NSW Budget focuses on essential services and increasing access to quality housing. The projections over the forecast period within the 2025-26 budget show the state’s budget position to return to surplus in 2027-28. Pressures remain on the state budget, including the cost of natural disasters and rising workers compensation. The state’s operating position has improved from a $10.7 billion deficit in 2023-24 to an expected $5.7 billion deficit this financial year and continuing to decrease to a $3.4 billion deficit in 2025-26 before returning to a forecast surplus of $1.1 billion for both 2027-28 and 2028-29 financial years (Figure 1).
Figure 1: General Government Budget Result
Inflation is near the Reserve Bank of Australia’s target range, and this has seen a pick-up in real wages growth without significant deterioration in the labour market. Household consumption is returning to pre-COVID levels despite uncertainty over the global economy impacting consumer sentiment.
Consumer spending is expected to lift despite global uncertainty, with cost-of-living pressures forecast to continue easing. Gross State Product (GSP) is expected to remain low at 1.75 per cent for both 2024-25 and 2025-26 financial years (Figure 2). Previous forecasts for productivity will not be reached, however, a small increase is expected over the forward estimates.
Figure 2: New South Wales economic performance and outlook
Gross debt to GSP is forecast to be 19.5 per cent by June 2025 and remain stable at around 20 per cent of GSP over the four years to June 2029 (Figure 3). Net debt is projected to be $130.7 billion by June 2028 which is $6.5 billion lower than forecast in the 2024-25 Half Year Economic Update.
With the significant reduction in debt, the NSW Government will save around $400 million in interest expenses per annum.
Figure 3: Key budget aggregates for general government sector
3. Planning and Coordination
Pre-sale Finance Guarantee
The NSW Government has announced a Pre-sale finance Guarantee to accelerate housing construction. Under this scheme, the NSW Government will act as a guarantor for qualifying residential projects over the next five years. The fund will guarantee pre-sales up to a total of $1 billion, with $5 – $50 million accessible for individual developments. Applications will open by the end of 2025.
Developers with planning approvals and initial pre-sales can apply for the Pre-sale Finance Guarantee and be assessed by the NSW Government. Once approved construction must commence within six months. The government has also outlined a buy-back process for dwellings that remain unsold.
The Pre-sale Financing Guarantee Scheme is a direct product of Property Council’s Ministerial Roundtable coordinated in May last year. In conjunction with the Australian Banking Association, the Property Council brought leaders across the finance and property industry together with government to discuss a financing mechanism that will unlock residential projects held back by commercial risk and lending constraints and we have continued to engage with Government in the development of the scheme.
Streamlining approvals
This budget will invest an additional $122 million to streamline housing delivery. This investment includes:
- $83.4 million on planning resources, including $10.6 million on the Housing Delivery Authority which has provided a streamlined approvals process for 53,000 homes since January.
- $20.9 million to support the delivery of enabling infrastructure for regional councils.
- $7.6 million to enable the NSW Government’s land audit to continue.
Projects
This budget continues investment in key projects, including:
- Redevelopment of the old Sydney Fish Market at Blackwattle Bay, with the NSW Government announcing capacity of 1,500 homes in a mix-used precinct at a cost of $58.9 million over four years.
- Delivery of the New Sydney Fish Markets, including construction of new public spaces and logistic facilities, has a remaining cost of $41.1 million. This brings total costs of the New Sydney Fish Market and the Blackwattle Bay Urban Development to $915.2 million.
- Mixed-use Central Barangaroo development to leverage the new metro entrance.
Investment Delivery Authority
The NSW Government is investing $17.7 million to establish the Investment Delivery Authority (IDA) to fast-track economic investment and lift productivity. The Authority has two clear objectives:
- Identify and clear barriers to major private investment projects.
- Advise on broader system reforms that promote investment, competition and support productivity in NSW.
Modelled on the Housing Delivery Authority, the IDA will coordinate government agencies, support up to 30 major projects annually, and help bring forward up to $50 billion in private investment each year.
The IDA will advise the Treasurer, Minister for Planning and Minister for Industry and Trade on planning and non-planning support to remove barriers to major non-residential projects valued above $1 billion such as data centres, logistics projects and hotels.
In addition, the NSW Government will host a global investment summit in October this year to devise strategies to attract more international investment to NSW.
Investing in Innovation
The NSW Budget has committed to attracting investment and boosting innovation for economic growth with a $79.2 million Innovation Blueprint package including:
- $20 million over four years for the Emerging Technology Commercialisation Fund to support NSW businesses to commercialise research into marketable products and services.
- $2 million over two years for the Housing Innovation Network to connect researchers, start-ups and industry to support the delivery of housing through new technologies and applied research.
- $2 million to establish a Housing Innovation in Construction program to support the delivery of housing by introducing innovative solutions such as industrialised construction facilities and advanced manufacturing processes.
- $38.5 million investment in Tech Central including the relocation of the Sydney Startup Hub.
- $6 million over three years to establish the Innovative Manufacturing Adoption Fund, supporting NSW-based businesses to diversify and expand manufacturing capabilities through the use of innovative technologies.
- $6 million to continue the Minimum Viable Product Ventures Program, supporting businesses to increase the commercialisation of innovative products; $4 million to establish the Diversity Pre-accelerator Program supporting founders from diverse backgrounds with tools to develop their business models and secure seed investment and; $700,000 for the extension of the National Space Industry Hub.
Vibrancy for economic growth
The NSW Government has announced a $512.3 million package to grow the creative economy and promote Sydney’s position as a vibrant global city. This includes $20.6 million towards the Office of the 24-hour-economy Commissioner to support the night-time economy and local councils through regulatory reform and precinct-based initiatives.
An additional $135 million is allocated to Destination NSW and their activities to grow the NSW Visitor Economy.
Draft works-in-kind (WIK) guidelines released for consultation
As part of this year’s budget the NSW Government released a draft framework to guide how developers can deliver infrastructure or dedicate land in place of a monetary contribution under the Housing and Productivity Contribution scheme. This will help bring forward critical state or regional infrastructure and reduce delays on housing projects. The Property Council has long advocated for a more flexible and transparent approach to contributions, and this draft represents a practical step forward. Submissions close on 17 July 2025.
Future Jobs and Investment Authority
The NSW Government has announced the establishment of a Future Jobs and Investment Authority, backed by $27.3 million over four years, to support economic transition in coal-producing regions including the Hunter and Illawarra. The Authority will oversee the development of strategic economic planning and infrastructure delivery to prepare communities for post-coal futures.
Key features include:
- A central Authority led by a CEO and supported by local Divisions in the Hunter, Illawarra, Central West and Northwest.
- A focus on land use planning, investment attraction, skills development, and industry diversification.
- A legislated framework to give communities long-term certainty.
- Alignment with the Commonwealth’s Net Zero Economy Authority to streamline delivery and coordinate efforts.
4. Housing
Build-to-rent tax concession
The NSW Government is investing in build-to-rent development by ensuring eligible projects receive a 50 per cent land tax concession, indefinitely. The government has removed the 2039 sunset clause, responding to our calls and providing long-term certainty to support feasibility and unlock sustained investment in secure, high-quality rental housing.
Housing for essential workers
This budget progresses initiatives of the 2024-25 NSW Budget under Landcom, including the delivery of 400 new build-to-rent dwellings for essential workers. The first site, located at the former WestConnex dive site, was announced early 2025. Further sites are being investigated for the Essential Workers Build-to-rent program, with construction expected to commence in 2026-27.
Homelessness Crisis Intervention
The NSW Government has announced $30.4 million in a new Crisis Intervention package, including $20 million to expand existing crisis and transitional housing. This package is aimed at providing front-line support while long-term reform takes effect.
Social housing
The NSW Government will continue capital expenditure of $5.1 billion for the new social housing under the Boost Program, announced in last year’s budget.
- No additional funding is announced for the Land and Housing Corporation’s (LAHC) capital maintenance program, beyond $1.3 billion over the next four years, announced in in the last Budget.
- LAHC will use funding under the Australian Government Social Housing Accelerator Agreement to deliver 850 new social homes.
- The NSW government will continue critical investment to the capital maintenance and upgrades of Aboriginal Housing Offices existing social housing stock.
5. Infrastructure
The 2025-26 Budget includes $118.3 billion infrastructure investment over four years through the Essential Infrastructure Plan.
Prioritised projects continuing or commencing delivery as part of the 2025-26 Budget include:
Transport
$55.6 billion for transport and infrastructure, including:
- $10.8 billion over four years for Sydney Metro West.
- $3.8 billion over four years for Western Sydney Harbour Tunnel Upgrade.
- $3.6 billion over four years for Sydney Metro-Western Sydney Airport.
- $2.1 billion over four years for Zero Emissions Buses Program.
- $1.2 billion over four years for Road Safety Investment.
- $844.3 million over four years for new buses to cater for NSW Services.
- $843.1 million over four years for Regional Rail Fleet.
- $801.4 million over four years for Sydney Metro City and Southwest.
- $741.7 million over four years for Pacific Highway Corridor – M1 To Raymond Terrace and Hexham Straight widening.
- $680.5 million over four years for Princes Highway Corridor Upgrade.
Health
$12.4 billion for health infrastructure to plan and deliver new and upgraded hospital and health facilities (estimated total costs shown below), including:
- $2 billion for new Bankstown Hospital.
- $1 billion for Nepean Hospital and Integrated Ambulatory Services Stage 1 and Stage 2.
- $940 million for Royal Prince Alfred Hospital Redevelopment.
- $835 million for John Hunter Health and Innovation Precinct.
- $790 million for Rouse Hill Hospital.
- $700 million additional funding to expand the New Bankstown Hospital Development.
- $492 million to develop a Statewide Pathology Hub on the Westmead Health Campus.
Education
- The government is investing $11 billion for schools and skills infrastructure including a continuation of $9 billion for school infrastructure investment, over the next four years. The pipeline includes new schools and school upgrades as well as expanding the high potential and gifted student opportunities across the state.
6. Taxes, Fees and Charges
The 2025-26 NSW Budget continues and extends Revenue NSW’s tax integrity program, to continue supporting an increased level of tax compliance to assist in delivering budget repair. Taxation revenue for 2024-25 has been revised down to $47.5 billion, $800 million lower than forecast in the 2024-25 budget and $287.1 million lower than forecast at the 2024-25 Half-Yearly Review due to reduced transfer duty. Taxation over the forward estimates has been revised up by $544.8 million over the four years to 2028-29 with an improved outlook for the property market, due to an increase in transfer revenue following the easing of monetary policy. This is offset by the downgrades to payroll tax revenue resulting from weaker employment and wages growth.
The 2025-26 Budget includes land tax cuts for owners of eligible new build-to-rent developments. Owners can apply to receive a permanent land tax concession of a 50 per cent reduction in assessed land value, commencing land tax year 2026 subject to eligibility requirements. This extends the concession that was due to end as of 31 December 2039.
7. Construction and Skills
The NSW Budget invests $3.4 billion in TAFE and skills funding. This includes $40.2 million over two years for an additional 23,000 Fee Free construction apprenticeships, building on the $8.9 million allocated for Fee Free training in FY 24-25. $13.8 million is allocated for a Construction Workforce Package to upskill 4,800 workers into residential construction within 2 years. This investment in workforce capacity and capability is critical to alleviating cost of construction pressures to unlock housing.
The NSW Budget provides an additional $145.1 million for Building Commission NSW, a significant increase on the additional $35 million in last year’s budget. This investment will support efforts to reform the building and construction industry and improve consumer outcomes. This funding will enable further digitisation to improve the Commission’s data analytics, and the Commission’s ability to stand up joint taskforces with Fair Trading, Australian Securities and Investment Commission, Australian Skills Quality Authority and the NSW State Coroner to ensure prosecutions can be carried out.
8. Energy and Sustainability
The NSW Government will continue to invest in NSWs energy transition with a significant extension and increase of the Transmission Acceleration Facility to help fast-track infrastructure as well as a continuation of investment in Renewable Energy Zones. Notably, the NSW Government is investing $115.5 million in supporting infrastructure including the construction of a Logistics Precinct at the Port of Newcastle. This will act as a key import site. Increasing our clean energy capacity is critical as the NSW Government looks to decarbonise the built environment.
This budget continues key projects under DCCEEW ($100 million), including the Biodiversity Upgrade to Biodiversity Offset Scheme, and announced land acquisition to conserve biodiversity outcomes.
9. Hunter and Central Coast
The 2025 NSW Budget delivers continued investment across the regions, particularly in the Hunter, with a focus on health, infrastructure, transport, logistics, and economic transition. We will continue to work with government to ensure both these regions are top of mind and being prioritised to ensure stronger investment.
Health and innovation
- Continued delivery of the $835 million John Hunter Health and Innovation Precinct, ensuring world-class healthcare and research facilities for the region.
Transport and infrastructure
- $741.7 million over four years to progress the M1 extension to Raymond Terrace and the Hexham Straight widening, improving travel times and freight efficiency along this major corridor.
- $530 million to design and build the Belmont Desalination Plant.
- $341.8 million to finalise planning and commence construction for the upgrade of the Pacific Highway through Wyong Town Centre.
- $294.9 million over four years to continue building the Singleton Bypass, easing congestion and improving road safety.
- $267 million over four years to fast-track the Muswellbrook Bypass, providing critical road infrastructure for the Upper Hunter.
- $100 million for the Maitland Station Westbound Overpass, addressing safety and capacity needs in a key growth corridor.
- $75 million Terrigal Drive Upgrade.
- $47.8 million for continuing construction of the Central Coast Highway, Tumbi Road Intersection Upgrade.
- $35 million in additional funding for the Thornton Bridge duplication, supporting traffic flow and connectivity.
- $29 million for the planning and design of Gosford Bypass.
- $5 million to upgrade the Speers Point roundabout, enhancing road safety and access.
Economic development and energy transition
- $115.5 million for the development of the Newcastle Logistics Precinct, supporting the shift to renewable energy by enabling more reliable and affordable logistics and energy supply chain capabilities.
- $27.3 million to establish the Future Jobs and Investment Authority, focused on driving new economic opportunities for coal-producing communities, including those across the Hunter.
Flood resilience
- $82.1 million over four years for the Hunter Valley Flood Mitigation Scheme Repairs and Rebuilding Project, strengthening existing infrastructure and safeguarding local communities and assets.
Public transport
- The region will benefit from a share in the $452 million statewide investment in new bus services, improving accessibility and public transport capacity.
8. Illawarra and the Shoalhaven
The 2025 NSW Budget has delivered significant investments across the Illawarra and Shoalhaven regions, with a strong focus on infrastructure, health, education, tourism and economic resilience. Key highlights include:
Tourism
- $80.4 million to create multi-day walking trails, including the Gardens of Stone Walk, Great Southern Walk, and the Illawarra Mountain Biking Network, enhancing regional tourism appeal and outdoor recreation.
Education
- A new primary school in West Dapto and a new high school in Wilton, addressing rapid population growth and supporting future communities.
Health
- $154 million over four years to redevelop Shoalhaven District Memorial Hospital, delivering a seven-storey acute services building and modernised facilities to boost capacity and access.
- $188.4 million over four years for the new Eurobodalla Regional Hospital, consolidating and expanding services previously offered by Batemans Bay and Moruya hospitals.
- $220 million to support future expansion and redevelopment of Wollongong Hospital and Health Precinct, including site investigations, land acquisition, and early works.
Transport infrastructure
- Continued work on the $390 million Mount Ousley Interchange, improving safety and freight access to Wollongong CBD.
- $680 million over four years to progress the Princes Highway Corridor Upgrade, including the Milton-Ulladulla Bypass, Jervis Bay Road upgrades, and safety improvements.
- $267 million over four years for major construction of the Mount Ousley Interchange.
- $20 million in additional funding for new south-facing ramps on the Princes Motorway at Dapto.
- Planning and delivery of the Milton/Ulladulla bypass, with 13km of new road to divert traffic from town centres and improve flow.
Housing and Community
- Ongoing $35 million build-to-rent project in Bomaderry, delivering 60 new homes via Landcom.
- $5 million to stabilise the Warrawong Parklands seawall, protecting public space from coastal erosion.
Economic Development
- $27.3 million to establish the Future Jobs and Investment Authority, supporting transition and diversification in coal-dependent communities.
- A share in a $452 million investment for new bus services across NSW, improving public transport access and regional connectivity.
This budget reflects continued recognition of the region’s growth and strategic importance, with meaningful investments in liveability, connectivity and economic transition.
9. Western Sydney
The key takeaway from this year’s Budget is that Western Sydney already has a significant infrastructure megaprojects pipeline (such as Sydney Metro West, Parramatta Light Rail Stage 2, and the St Marys to Bradfield metro), and the delivery of these previously announced funding commitments continues as planned.
Aerotropolis
The government’s efforts in this year’s budget are targeted at initiatives to get the Western Sydney Aerotropolis ready for the airport’s opening in 2026, with money earmarked for nearby road adjustments, the Mamre Road Stormwater Scheme, funding for a fire station at Luddenham.
Road funding – new commitments
- $1 billion for the first stage of the Fifteenth Avenue Upgrade between Liverpool and the new airport (funded with the Australian Government).
- $50 million for road upgrades near Western Sydney International Airport.
- $39 million for planning for the Devonshire Road, Devonshire Link Road and Bradfield Metro Link Road jointly funded by the NSW and Australian Governments.
- $196.5 million for Mulgoa Road Stage 2 (Glenmore Parkway to Jeanette Street).
- $116.2 million for the M12 Motorway (M7 to the Northern Road).
- $58.8 million for Mulgoa Road Stage 1 (Blaikie Road to M4).
- $3.4 million for Coreen Avenue and Coombes Drive Upgrades (Australian Government funded).
- $1.9 million for Coreen Avenue and Lemongrove Road Signals (Australian Government funded).
- $74 million for planning for the Richmond Road Corridor Upgrade.
- $30 million over four years for planning for Townson and Burdekin Road Upgrades, jointly funded by the NSW and Australian Governments.
- $392.8 million over four years for Richmond Road widening between the M7 and Townson Road, and $152.6 million over four years for widening at Elara Boulevard.
- $80 million for the Western Sydney Heavy Vehicle Rest Area, jointly funded by the NSW and Australian Governments.
- $25 million for Toongabbie Bridge Enabling Works (Australian Government funded).
- $200 million for Homebush Bay Drive jointly funded by the NSW and Australian Governments.
- $99.4 million over four years for the Hill Road upgrade at Sydney Olympic Park.
Health – new commitments
- $500,000 to create an acute Palliative Care Ward at Campbelltown Hospital.
- Additional $700 million for the New Bankstown Hospital to effectively integrate hospital inpatient services on the one site in the centre of Bankstown. This increases the total investment in the New Bankstown Hospital from $1.3 billion to $2 billion.
- $492 million to develop a Statewide Pathology Hub on the Westmead campus to deliver pathology, public health, medical research and essential specialised support services.
- $40.1 million to fit out level 13 of the new Paediatric Services Building at Westmead in partnership with the Sydney Children’s Hospitals Foundation. This increases the total spend for the redevelopment of The Children’s Hospital at Westmead (Stage 2) to $659.1 million.
- $22.3 million to establish a new paediatric hospice at The Children’s Hospital at Westmead for children and young people with life-limiting illness and their families.
- Additional State funding of $90 million to provide the full range of maternity and birthing services at the new Rouse Hill Hospital, with a further $120 million also announced by the Australian Government. These two funding commitments increase the total investment for the new Rouse Hill Hospital project to $910 million.
New schools
- Additional investment towards a new high school at Wilton.
- A new primary school for Emerald Hills, including a new preschool.
- A new primary school at Grantham Farm, including a new preschool, to support communities in the North West Growth Area.
- Planning work underway for Westmead school projects.