On Tuesday 24 June, NSW Treasurer Daniel Mookhey MLC released the 2025-26 NSW State Budget. You can access all the budget papers here. 

‘Responsible budget management’, i.e. prioritising NSW fiscal position – and its AAA credit rating – over other socio-economic objectives seems to be very much the theme for the next year, with the State Government focusing on reducing budget deficits and returning the budget to surplus. For housing policy, this translates to an approach focused on supporting general supply, with fiscal constraint impacting any consolidation of the progress made through the commitments of the 2024-25 budget. 

While Shelter NSW welcomes the support of NSW Government for more housing supply, we caution against a ‘build, baby, build’ approach. Years of record supply over the last decade have arguably done very little to improve housing affordability, due to other factors such as tax settings that favour investors over first home buyers, and property developers being able to control supply through staged releases. We argue that good supply policy would include oversight and control measures to ensure that the housing delivered is affordable to people on low to moderate incomes and/or contributes to downward pressure on rental and purchasing prices. Currently, this is absent.  

We are also sceptical as to which grounds justify the new permanent land tax concession of 50% afforded to ‘Build to Rent’ (BTR) developments. We welcome and support the growth of an institutional landlord sector, since it might set higher standards for private rental products compared to amateur landlords. But BTR developments remain largely, at present, a premium product targeted at people living on higher incomes in urban areas. While we had welcomed the federal changes to the withholding tax rate for BTR developments, a permanent 50% land tax concession seems to be disproportionate compared to the outcomes it is likely to yield. The original 2039 sunset clause for the concession was supposed to support the sector in its infancy, not to become a permanent tax concession with no clear purpose or oversight mechanism.  

Key commitments for housing in the 2025-26 NSW Budget include: 

• $1 billion Pre-Sale Finance Guarantee with NSW Government acting as guarantor for up to 50% of pre-sales for eligible residential projects, allowing developers to secure finance and/or bring projects to market quicker with Government step in provisions to apply should schemes fail that allows the stock to become social or affordable housing 
• $20m for crisis and transitional accommodation 
• Investments in the construction workforce with $40.2m dedicated to delivering an additional 23,000 fee free construction apprenticeships and a $13.2m Construction Workforce Package to upskill 4,800 residential construction workers 
• $4m to establish the Housing Innovation Network and Housing Construction Program to support the delivery of innovative construction methods to accelerate housing construction, connecting industry with researchers and start-ups.  

While investment in innovation and labour, coupled with market incentives, will assist developers in delivering housing supply, this will do little to address the affordability crisis that has consumed the people we represent. With housing stress continuing to increase, we will always call on the NSW Government to continuously invest in social housing and specialist homelessness accommodation and services.  

Shelter welcomes the State’s $20m investment in crisis accommodation, noting, however, it remains extremely limited compared to the depth and breadth of the need; specialist homelessness services (SHS) have been operating well above funded capacity for years. This commitment falls well short of Shelter’s pre-budget submission ask of a 30% increase to SHS funding over two years to address current capacity constraints that see almost 1 in 2 clients turned away.  

The most effective way the government can address our housing crisis is through the establishment of a long term, at scale supply pipeline of social housing. While last year unprecedented investment in social housing is incredibly welcome and will make a difference, it remains far from the catch-up required to address years of under-funding. We call on the NSW Government once again to continue the best investment it can do to address the housing crisis; investing in social housing, including public housing.