The Pulse | 1 October 2025

Policy accelerators • Financing tools • Bigger pipeline

This edition of The Pulse examines the continuing policy-driven activity across the NSW construction sector. 

The state government is deploying a multi-front strategy to address the housing shortfall, combining accelerated planning pathways, innovative financing guarantees and significant rezoning initiatives. 

Developments are being fast-tracked through State Significant Development (SSD) declarations in key growth corridors like the Hunter and Central Coast, while Sydney councils are advancing ambitious plans for tens of thousands of new homes [5, 12, 17]. 

To unlock stalled projects, the government recently launched a landmark $1 billion Pre-sale Finance Guarantee program, directly targeting financing bottlenecks [18]. This supply-side push is occurring alongside federal demand-side stimulus, such as a new 5% deposit scheme, which has raised concerns about further house price inflation [1, 19]. 

In parallel, the state’s infrastructure pipeline is progressing, with major energy transition projects like HumeLink and new battery tenders moving forward, while landmark transport projects set new benchmarks for sustainability [7, 15, 20]. 
For industry professionals, this landscape continues to present significant opportunity but demands careful navigation of evolving regulatory frameworks and elevated quality expectations.

NSW's Multi-Front Strategy to Tackle the Housing Shortfall

The NSW government and local councils are pursuing a range of policy levers to boost housing supply. 
A key mechanism is the expanded use of State Significant Development (SSD) declarations, which provide a streamlined, state-level approval pathway for major projects [5, 12]. 

In the Hunter and Central Coast alone, 14 projects have been declared SSDs since January, with the potential to deliver over 3,500 new homes, including affordable housing components [12]. This approach is also central to major urban renewal projects like the Transport-Oriented Development (TOD) in Corrimal, which will deliver at least 550 homes on a former industrial site [8]. 

Locally, Sydney councils are advancing their own large-scale plans. The Inner West council has approved a rezoning to allow for up to 30,000 new homes over 15 years, permitting buildings up to 22 storeys in town centres [16, 17].

These consumer supply-side measures are complemented by new planning systems designed to incentivise affordable housing for essential workers, with the state committing to building 8,400 new social homes in Kiama [6]. 

This policy push is set against a backdrop of federal demand-side stimulus, including a new 5% deposit scheme for first-home buyers. While intended to improve access, concerns have been raised that the scheme may inadvertently inflate housing costs by up to 10% in its first year [1, 19]. 

Financing and Delivering Growth: New Models and Old Pressures

Despite the approval pathways available, securing finance and funding for residential projects has remained challenging, prompting both government and private sector innovation. 

As covered in last week’s edition of the Pulse, the NSW Government has launched a landmark $1 billion Pre-sale Finance Guarantee (PFG) program to openly address financing barriers [18]. The five-year scheme allows the government to commit to purchasing up to 50% of off-the-plan homes in eligible projects, giving lenders the certainty needed to finance construction and unlock more than 13,000 approved projects that are yet to break ground [18]. 

This state intervention coincides with a tightening credit environment where non-bank lenders are stepping in to fill the gap left by traditional banks [13]. For example, Sydney-based Prime Capital has launched a new "Business Builder" loan targeting small to medium-sized developers with financing between $1 million and $10 million, offering faster approvals and no pre-sale conditions [13]. 

While these new financing avenues emerge for the residential sector, the long-term funding of community infrastructure is being addressed through developer contributions. In a significant move, Wollondilly Shire Council has secured a $1.36 billion contributions plan for Appin, ensuring that developers, not ratepayers, will fund the roads, parks and facilities required for 18,650 new homes over the next 30 years [14].  Though this model shifts the financial burden of growth to those driving it, the contribution scheme introduces a cost for developers, potentially impacting feasibility in a market already grappling with rising material and labour costs [13, 14].

Infrastructure Pipeline Powers Ahead: Energy and Transport Lead the Charge

Alongside the policy focus on housing, major infrastructure development continues to progress, particularly in the energy and transport sectors. 

The $5 billion HumeLink transmission project has entered its large-scale construction phase with the delivery of its first piling rig, signalling a ramp-up in activity and demand for specialised subcontractors and labour [7]. 

The state’s energy transition is driving further opportunities, with NSW opening a tender for 500 MW of firming capacity, primarily batteries and demand response systems, to help fill the gap left by the planned 2027 closure of the Eraring coal generator [15]. This adds to a steady pipeline of renewable projects, such as the 32 MW Mulwala solar farm, where new entities are winning key contracts for grid connection infrastructure [3]. 

These large-scale projects are also creating direct community benefits, with funds from the Central West Orana Renewable projects providing a $6 million grant for housing restorations and new community spaces in Gilgandra [10]. 

In the transport sector, sustainability is becoming a defining feature of project delivery. The Coffs Harbour bypass has set a new benchmark by achieving the highest possible Infrastructure Sustainability (IS) Design rating, exceeding both contractual requirements and the Minister’s Conditions of Approval [20, 21]. This was achieved through innovations like using lower embodied carbon materials and designing for climate change resilience, setting a precedent for future major project tenders across the state [20, 21].

Takeaways

Navigating Evolving Planning Pathways and Contribution Schemes

The government's push to accelerate housing supply is creating new regulatory pathways that professionals must master. The increasing use of State Significant Development (SSD) declarations under the Environmental Planning and Assessment Act 1979 offers developers a way to bypass local council approvals for a more streamlined, state-level process [5, 8, 12]. 

While this can reduce timelines, it requires an understanding of the Housing Delivery Authority's criteria and state-level planning priorities. Simultaneously, the approval of the $1.36 billion Appin Contributions Plan signals a robust enforcement of developer obligations to fund enabling infrastructure [14]. 

For developers and contractors, this means project feasibility must now account for legally binding contribution costs that go beyond previous caps. Legal and commercial teams must conduct thorough due diligence on the specific planning controls and contribution schemes applicable to a project, as these mechanisms, while designed to facilitate growth, introduce distinct compliance requirements and financial considerations that need to be priced into any tender or development pro-forma.

The Rise of Contractual Sustainability and Quality Mandates

Recent developments demonstrate that sustainability and build quality are shifting from aspirational goals to core, enforceable contractual obligations in NSW. The Coffs Harbour bypass project's success in exceeding its mandated sustainability targets highlights a clear trend where major infrastructure contracts now include specific, measurable environmental performance requirements [20, 21]. Not meeting these requirements may create commercial exposure for contractors. 

This focus on verifiable outcomes is mirrored in the new Pre-sale Finance Guarantee (PFG) program, where eligibility is tied to oversight from the NSW Building Commissioner [18]. To access the program, developers and builders must meet benchmarks for "capability, credibility and capacity," reinforcing the standards set by legislation like the Design and Building Practitioners Act 2020. 

The legal takeaway is clear: firms must embed quality assurance and sustainability management systems into their operations. These are no longer just reputational matters but are becoming critical prerequisites for accessing government-backed projects and finance, with non-compliance posing a direct constraint to project eligibility and commercial viability.

Final Thoughts 

The NSW construction landscape continues to be reshaped by decisive government intervention aimed at resolving the state's housing shortfall. The confluence of streamlined planning approvals, innovative financing models and large-scale rezoning presents a generational opportunity for the industry. 

However, this opportunity is intrinsically linked to new layers of complexity and commercial considerations. Success will be defined not just by the ability to build, but by the capacity to navigate sophisticated planning pathways, manage rising contribution costs and meet non-negotiable standards for quality and sustainability. 

For developers, builders and contractors who can adapt to this new paradigm, the pipeline of work is substantial. For those who cannot, the barriers to entry and financial pressures are becoming increasingly difficult to shoulder. The coming months will test the industry's ability to translate policy into tangible, high-quality outcomes for the state.

1. The Daily Mail | by Australian Associated (1 October 2025). Housing deposit scheme opens doors, but cost fear looms. https://www.dailymail.co.uk/wires/aap/article-15150277/Housing-deposit-scheme-opens-doors-cost-fear-looms.html
2. NSW Nationals (30 September 2025). Ground breaks at site of new Cowra preschool. https://www.nswnationals.org.au/ground-breaks-at-site-of-new-cowra-preschool/
3. Renew Economy (30 September 2025). Grid connection contract awarded for small new solar project in NSW. https://reneweconomy.com.au/grid-connection-contract-awarded-for-small-new-solar-project-in-nsw/
4. Janelle Saffin (29 September 2025). Northern Rivers homes previously occupied by squatters, on the move. https://janellesaffin.com.au/2025/09/29/northern-rivers-homes-previously-occupied-by-squatters-on-the-move/
5. Newcastle Weekly (28 September 2025). More Hunter projects declared ‘State Significant’ in bid to address housing crisis. https://newcastleweekly.com.au/more-hunter-projects-declared-state-significant-in-bid-to-address-housing-crisis/
6. Kiama Bugle (27 September 2025). Housing, schools and small business high on new MP’s agenda. https://thebuglenews.com.au/NewsStory/housing-schools-and-small-business-high-on-new-mps-agenda/68d5e37614e75b002e449fc5
7. Energy News Bulletin (26 September 2025). Piling rig delivery marks new phase for $5b HumeLink project. https://www.energynewsbulletin.net/energy-transition/news-analysis/4520650/piling-rig-delivery-marks-phase-usd5b-humelink-project
8. Paul Scully. (n.d.). Work begins on new Transport Oriented Development housing development in Corrimal. https://paulscullymp.com.au/news/media-releases/work-begins-on-new-transport-oriented-development-housing-development-in-corrimal/
9. by Indesignlive. (n.d.). Comment: To reach net-zero, we must tackle the ‘too hard’ basket. https://www.indesignlive.com/ideas/cox-comment-irger
10. Coonamble Times (26 September 2025). Renewables grant gives Gilgandra new energy. https://www.coonambletimes.com.au/renewables-grant-gives-gilgandra-new-energy/
11. Build Australia (25 September 2025). NSW launches guarantee to accelerate housing. https://www.buildaustralia.com.au/news_article/nsw-launches-guarantee-to-accelerate-housing/
12. Property Council of Australia (25 September 2025). More Hunter and Central Coast Projects Declared State Significant. https://www.propertycouncil.com.au/media-releases/more-hunter-and-central-coast-projects-declared-state-significant
13. Australian Broker | by Kellie Ell 25 September 2025, 11:39am AEST. (25 September 2025). Prime Capital launches new construction loan amid financing squeeze. https://www.brokernews.com.au/news/breaking-news/prime-capital-launches-new-construction-loan-amid-financing-squeeze-288103.aspx
14. Wollondilly Shire Council (25 September 2025). $1.36 billion of local infrastructure for Appin. https://www.wollondilly.nsw.gov.au/home/latest-news/1-36-billion-of-local-infrastructure-confirmed-for-appin-as-councils-contributions-plan-approved
15. Renew Economy (1 October 2025). NSW opens new tender for batteries and demand response to help fill Eraring coal gap. https://reneweconomy.com.au/nsw-opens-new-tender-for-batteries-and-demand-response-to-help-fill-eraring-coal-gap/
16. The Guardian | by Penry Buckley (1 October 2025). Sydney council backs controversial plan to build up to 31,000 new homes. https://www.theguardian.com/australia-news/2025/sep/30/sydney-council-backs-controversial-plan-to-build-up-to-31000-new-homes
17. Nathan Schmidt. (n.d.). Inner West council plan for 30k homes passes major test. https://www.countryman.com.au/news/inner-west-council-plan-for-30k-homes-passes-major-test-c-20194093
18. Architecture and Design (30 September 2025). NSW's landmark finance guarantee program to speed up new home construction. https://www.architectureanddesign.com.au/editorial/industry-news/NSW-s-landmark-finance-guarantee-program-to-speed-up-new-home-construction
19. (30 September 2025). Housing deposit scheme opens doors, but cost fear looms. https://www.perthnow.com.au/news/politics/housing-deposit-scheme-opens-doors-but-cost-fear-looms-c-20197835
20. Australasian Transport News. (n.d.). Coffs bypass crowned with highest sustainability rating. https://www.fullyloaded.com.au/coffs-bypass-crowned-with-highest-sustainability-rating/
21. Deals on Wheels. (n.d.). Coffs Harbour bypass celebrates sustainability rating. https://www.tradetrucks.com.au/coffs-harbour-bypass-celebrates-sustainability-rating/