The Pulse | 22 January 2026

Homes, Hubs & Power Plays: NSW Construction at a Turning Point

This week’s Pulse looks at where NSW’s policy agenda is landing on site.

The housing response is continuing, but the focus is shifting to the delivery levers. Financial de-risking, faster planning pathways and state-led rezonings are being used to move supply, particularly around transport hubs.

For major infrastructure, capital spend remains the anchor. A $3 billion overhaul of Sydney’s wastewater system sits alongside ongoing road and rail delivery, keeping a long runway of work in play for tier one and mid tier contractors.

In energy, the pipeline continues to expand through renewables and battery storage, while the extension of the Eraring coal-fired power station highlights the continued role of firm capacity as new infrastructure is brought online.

For developers, builders and contractors, the settings are consistent. Government priorities are driving sequencing and approvals, and delivery remains the key variable.

State Intervention Accelerates Housing Supply Through Planning and Financial Levers

The NSW Government is leaning harder on direct market intervention to move housing projects through finance and approvals, using mechanisms designed to bypass common delivery friction points [4, 7, 16].

A $1 billion guarantee scheme is being used to underwrite up to 50 per cent of pre sales for approved developments, targeting the finance barrier that often delays commencement [4]. Rozelle Village, a 227 home project on the former Balmain Leagues Club site, is the first development to use the scheme, with the guarantee intended to allow construction to proceed without waiting for typical bank pre sale thresholds [4].

Planning settings are being applied with the same intent. The State Significant Development pathway has supported approval of a 106 apartment development near Gordon Station despite local zoning restrictions and community objections [16, 18]. The project relies on the State Environmental Planning Policy (Housing) 2021 to enable higher density near transport, consistent with the broader approach [16]. The Housing Delivery Authority has also fast tracked a $127.6 million dual tower proposal at Homebush in support of state targets [7].

State led rezoning is continuing in parallel, with plans to facilitate up to 10,000 new homes around the new Woollahra Station, again linking housing uplift to infrastructure delivery [19]. Across Sydney, large residential proposals in Penrith [21], Marsden Park [12] and West Gables [1] show the volume of projects now moving through these policy settings, with affordable housing components frequently included to align with stated objectives [4, 7, 12, 16, 21].

Public Works Power Project Pipeline with Major Water and Transport Upgrades

Public infrastructure spending continues to underpin near term and long run work across NSW, with major packages progressing in water and transport [3, 24].

Sydney Water has commenced a $3 billion, ten year program to upgrade the Malabar wastewater system, which services close to two million people [3, 23, 25]. The program follows environmental incidents in late 2024 involving debris balls on Sydney beaches, and is directed at improving capacity and reliability in an ageing network under population pressure [3, 25]. The Malabar System Alliance, comprising ACCIONA and SMEC, has been appointed to deliver the first stage, with works focused on upgrades at the Liverpool and Glenfield facilities to lift treatment performance and system resilience [22, 23]. For civil and environmental delivery teams, the program establishes a sustained package of work over the coming decade [22].

Transport projects are also moving. The $2.24 billion M1 Pacific Motorway extension to Raymond Terrace has completed foundation works for 11 new bridges and is forecast to support up to 2,700 jobs [24]. In the CBD, Sydney Metro West continues to take shape, with Lendlease, Mirvac and Coombes Property Group confirmed as precinct partners for the Hunter Street Station development, scheduled to open in 2032 [17]. Planning and early works are also underway for the new Woollahra Station, Sydney’s first new heavy rail station in more than a decade, with construction expected to commence in 2027 [19].

Energy Transition Creates Dual-Track Opportunities  

Investment in renewables and storage continues to expand in NSW, while system reliability remains a live issue as coal generation stays in the mix for longer [8, 9, 13].

On the build side, capital is still moving into utility scale solar and batteries. I Squared Capital has committed US$300 million into ANZA Power, which is developing 80 MWac of solar hybrid plants and 320 MWh of battery storage in NSW and Victoria [14]. A separate $210 million, 120 MW standalone battery project near Deniliquin has also been approved [15]. Household storage is scaling as well, with a federal program supporting 200,000 household batteries installed in six months, including several high uptake postcodes in NSW [9]. As battery deployment increases, storage is starting to change the dispatch mix, with reports pointing to batteries increasingly displacing gas fired generation [2].

Reliability remains part of the transition picture. Origin Energy has extended the operation of the 2,880 MW Eraring coal fired power station until April 2029, citing supply reliability concerns raised by the Australian Energy Market Operator [8, 13]. The extension sits alongside broader concerns about the condition and reliability of the ageing coal fleet and the sequencing of replacement capacity [8, 13].

For construction and delivery teams, the market continues to run in parallel. The long term work is in renewables and storage, while near term activity includes keeping existing thermal assets operating as the system manages the transition period [8, 14].

Final Thoughts

This week’s signals are consistent with the direction set over the past year. State involvement remains a defining feature across housing, infrastructure and energy.

In housing, government is using planning pathways and financial mechanisms to bring projects forward and lift density around key locations. For proponents, progress continues to depend on how closely proposals fit within those state settings.

In infrastructure, the pipeline is being sustained by large water and transport programs that are moving into delivery and creating steady work for contractors and consultants.
In energy, the transition remains active through renewables and storage, while reliability requirements continue to keep existing generation in the mix for longer.

Across the market, the practical focus remains delivery. Approvals, sequencing and capacity are still the variables that determine what reaches site and when.

1. Daily Telegraph - Hills Shire Times | by Summer Liu (19 January 2026). Major Sydney suburb revealed with plans for more than a thousand new homes. https://www.dailytelegraph.com.au/newslocal/hills-shire-times/major-sydney-suburb-revealed-with-plans-for-more-than-a-thousand-new-homes/news-story/14249b05d155b891e253d3c2136a5a1e?btr=cd2dd30939e1604e78553d27c0d882dc
2. Renew Economy | by Peter Newman (19 January 2026). The rise of battery storage, and why the grid is rapidly passing gas!. https://reneweconomy.com.au/the-rise-of-battery-storage-and-why-the-grid-is-rapidly-passing-gas/
3.  Australasian Leisure Management | by Karen Sweaney (19 January 2026). NSW commits $3 billion to wastewater upgrades as debris ball fallout reshapes beach management. https://www.ausleisure.com.au/news/nsw-commits-3-billion-to-wastewater-upgrades-as-debris-ball-fallout-reshapes-beach-management
4. By Megan Gorrey (21 January 2026). Why a divisive plan to build 227 homes on the old Balmain Leagues site will be fast- tracked. https://www.watoday.com.au/national/nsw/why-a-divisive-plan-to-build-227-homes-on-the-old-balmain-leagues-site-will-be-fast-tracked-20260120-p5nvez.html
5. Newcastle Weekly | by Rod Thompson (19 January 2026). Construction surges ahead on M1 Pacific Motorway extension. https://newcastleweekly.com.au/construction-surges-ahead-on-m1-pacific-motorway-extension/
6. Intentionally left blank.
7. The Urban Developer | by Clare Burnett (19 January 2026). Level 33 Files Dual-Tower Proposal for Homebush. https://www.theurbandeveloper.com/articles/level-33-homebush-sydney-inner-west-apartment-state-significant-project-lodged-loftus-crescent
8. Mining Weekly | by Reuters (21 January 2026). Origin Energy to extend operations of NSW coal-fired power plant to 2029. https://www.miningweekly.com/article/origin-energy-to-extend-operations-of-nsw-coal-fired-power-plant-to-2029-2026-01-20
9. Ministers for Climate Change, Energy, the Environment and Water (17 January 2026). 200,000 bill busting batteries installed in just six months. https://minister.dcceew.gov.au/bowen/media-releases/200000-bill-busting-batteries-installed-just-six-months
10. NT News | by Joseph Carbone (16 January 2026). Fortescue pushes ahead with its green agenda as Pilbara wind farm construction begins. https://www.ntnews.com.au/business/fortescue-pushes-ahead-with-its-green-agenda-as-pilbara-wind-farm-construction-begins/news-story/581b1b0654189a9076d25ca5dacc30a2?btr=befe2316d501b18c4dc159995d28522e
11. Inside Construction | by Ashley Grogan (16 January 2026). Preferred proponent named for Sydney’s Blackwattle Bay project. https://www.insideconstruction.com.au/construction-projects/preferred-proponent-named-for-sydneys-blackwattle-bay-project/
12. Daily Telegraph - Blacktown Advocate | by Tileah Dobson (16 January 2026). South Street, Marsden Park: Major development with 829 dwellings proposed for ‘emerging’ Sydney suburb. https://www.dailytelegraph.com.au/newslocal/blacktown-advocate/south-street-marsden-park-major-development-with-829-dwellings-proposed-for-emerging-sydney-suburb/news-story/05fbd9a8c2fea74ab316272bc08efda8?btr=96d873b861f9ac44df541198f5db673b
13. Proactive Investors | by Jonathan Jackson (20 January 2026). Coal Australia backs Origin Energy’s Eraring extension to 2029 as Clean Energy Council urges faster renewables build-out. https://www.proactiveinvestors.com.au/companies/news/1085881/coal-australia-backs-origin-energy-s-eraring-extension-to-2029-as-clean-energy-council-urges-faster-renewables-build-out-1085881.html
14. Financial Standard | by ANGELIQUE MINAS (16 January 2026). I Squared Capital's innovative, $300M sustainable energy solution. https://www.financialstandard.com.au/news/i-squared-capital-rolls-out-300m-sustainable-energy-solution-179811223
15. By Giles Parkinson (16 January 2026). Standalone battery proposed for old gravel pit gets final planning tick despite long distance objectors. https://reneweconomy.com.au/standalone-battery-proposed-for-old-gravel-pit-gets-final-planning-tick-despite-long-distance-objectors/
16. Urban Digest (16 January 2026). State Clears 106-Apartment Development Near Gordon Station. https://urbandigest.com.au/ssd-82395459-residential-flat-buildings-x-2-at-burgoyne-street-burgoyne-lane-and-pearson-avenue-gordon/
17. Inside Construction | by Ashley Grogan (15 January 2026). Sydney Metro names partners for Hunter Street Station precinct. https://www.insideconstruction.com.au/news/latest-news/sydney-metro-names-partners-for-hunter-street-station-precinct/
18. North Sydney Sun  (15 January 2026). Plans revealed to knock down and rebuild Milsons Point tower just months after major refurbishment. https://northsydneysun.com.au/business-property/plans-revealed-to-knock-down-and-rebuild-milsons-point-tower-just-months-after-major-refurbishment/
19. By Monica Gameng. (None). Planning and early works get underway on new Woollahra Station NSW. https://www.felix.net/project-news/planning-and-early-works-get-underway-on-new-woollahra-station-nsw
20. Brisbane Development | by Brisbane Development (20 January 2026). Hamilton Grove Proposal Unveiled For Northshore Hamilton Site. https://brisbanedevelopment.com.au/hamilton-grove-proposal-unveiled-for-northshore-hamilton-site/
21. Daily Telegraph - Penrith Press | by Tileah Dobson (20 January 2026). 39-49 Henry Street: Developer reveals plan for huge twin residential towers on busy Penrith street. https://www.dailytelegraph.com.au/newslocal/penrith-press/39-49-henry-street-developer-reveals-plan-for-huge-twin-residential-towers-on-busy-penrith-street/news-story/40a105f6b152b2a2b9e46a91e7e7d984?btr=eb9449d79b0dc499a6634779feef4f64
22. Trade Earthmovers (20 January 2026). ACCIONA and SMEC to deliver extensive Sydney wastewater infrastructure upgrade. https://www.tradeearthmovers.com.au/acciona-and-smec-to-deliver-extensive-sydney-wastewater-infrastructure-upgrade/
23. Infrastructure | by Kody Cook (20 January 2026). $3B wastewater upgrade to prevent debris balls. https://infrastructuremagazine.com.au/3b-wastewater-upgrade-to-prevent-debris-balls/
24. Felix Project | by Monica Gameng (20 January 2026). Significant milestone reached on M1 Pacific Motorway extension project. https://www.felix.net/project-news/significant-milestone-reached-on-m1-pacific-motorway-extension-project
25. Utility | by Hayley Ralph (20 January 2026). The $3 billion plan to stop debris balls and safeguard Sydney’s beaches. https://utilitymagazine.com.au/the-3-billion-plan-to-stop-debris-balls-and-safeguard-sydneys-beaches/