WA unveils $250m guarantee to unlock housing supply

The initiative, branded the Pre-sale Guarantee, is expected to unlock up to 1,200 new apartments and town houses by addressing one of the primary barriers to development finance: high pre-sale thresholds required by lenders.

Under the scheme, Keystart (Western Australia’s home loan initiative) will guarantee the purchase of up to 50 per cent of unsold dwellings in eligible developments upon completion. This is intended to help developers meet lender requirements and commence construction sooner.

The guarantee will lapse if apartments are sold during construction. If triggered, Keystart will purchase the properties at a minimum discount of 10 per cent to market value in metropolitan areas and 7.5 per cent in regional areas.

Eligible properties acquired under the scheme will be made available through government-backed housing programs, including the $210 million Urban Connect Shared Equity program, or other state housing initiatives.

The program is similar to the $1 billion Pre-sale Guarantee project, launched by the NSW government in 2025.

The program is expected to open for applications in the second half of 2026, with different eligibility settings for regional projects, including higher guarantee proportions and lower discount rates to encourage supply outside metropolitan areas.

Alongside the guarantee, the government has also increased Keystart property price limits. The cap for low-deposit loans will rise from $800,000 to $860,000, while limits for the Urban Connect Shared Equity scheme will increase from $730,000 to $800,000. Other shared equity product limits will lift from $660,000 to $720,000.

Premier Roger Cook said the policy forms part of a broader housing strategy.

“My government’s vision is to ensure every Western Australian has a home,” he said.

“In this year’s Budget, we are prioritising housing, including unlocking and delivering more land supply, building more homes for Western Australians and helping first home buyers get into the market.”

Treasurer Rita Saffioti said the measure targets a key constraint in development finance.

“Too often we see shovel-ready apartment developments stall because they can’t meet pre-sale requirements set by the banks,” she said.

“The new Pre-sale Guarantee will remove that barrier, accelerate construction and get more affordable homes built sooner.”

This is not the first attempt by the Western Australian government to lift the state out of its supply crunch. The state launched Help to Buy in January and increased the land tax exemption for build-to-rent developments. It has also since tweaked stamp duty concessions for off-the-plan and under-construction homes.

NSW scheme builds traction as states adopt model

Western Australia’s move follows similar policy settings in NSW, where a $1 billion pre-sale guarantee program has been deployed to support apartment developments.

The policies both work to address the same issue. As part of financial terms, banks and other lenders often mandate that projects sell a high proportion of homes in a development before they will provide construction funding. This can significantly delay construction from starting or even make projects unviable.

As in Western Australia, the NSW government will therefore commit to purchasing up to 50 per cent of off-the-plan dwellings in a project, reducing lender risk and enabling earlier access to construction finance.

Recent allocations under the scheme include support for developments in Pyrmont and Westmead, contributing to more than 540 homes already accelerated since the program’s launch in late 2025.

The NSW government has reported strong developer interest, with dozens of expressions of interest received and multiple projects progressing through assessment.

Brokers question impact on supply

Despite growing adoption of pre-sale guarantees, some development finance brokers have questioned their broader effectiveness in addressing housing shortages.

Jean-Pierre Gortan, managing director of Simplicity Loans and Advisory, told Broker Daily that the NSW model may improve funding efficiency but is unlikely to materially shift supply constraints.

“The NSW Government’s Pre-Sale Finance Guarantee is well-intentioned and should help reduce funding costs,” he said.

However, he noted the scheme is more likely to support projects that are already close to viability, particularly in premium or inner-city markets.

“In that sense, it improves funding efficiency rather than fundamentally changing project feasibility,” Gortan said.

He added that structural issues – including planning delays, construction costs, labour shortages, and regulatory changes – remain the primary constraints on housing delivery.

“The broader challenge is that the housing supply issue is not primarily a funding problem,” he said.

“The key constraints sit elsewhere, including lengthy planning and approval processes, elevated construction costs, labour shortages, and recent legislative changes that have made the use of third-party construction companies more expensive and risk-heavy.”

[Related: Why bridging finance is surging in WA’s property market]

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