Property industry groups in New South Wales are urging the state government to secure billions in infrastructure funding ahead of the 2027 election, warning that housing targets cannot be met without timely investment in roads, utilities, and community facilities. The Urban Development Institute of Australia NSW (UDIA NSW) and Local Government NSW (LGNSW) have aligned on the need for infrastructure funding, though their proposals differ in scale and scope.
Differing Funding Proposals
UDIA NSW is advocating for a $500 million allocation to provide interest-free loans to councils, alongside a $2 billion Housing Infrastructure Acceleration Fund and a $500 million Housing and Productivity Fund. The group is also pushing for the removal of the cap on works-in-kind funding, allowing developers to deliver infrastructure instead of cash contributions. “This election is not a time to play politics with housing. NSW must double down on increasing the supply of new homes or risk locking out generations of future owners,” said UDIA NSW chief executive Stuart Ayres.
LGNSW, on the other hand, is seeking a $5 billion loan facility and $3 billion in forward-funding for state and regional infrastructure. The president and Inner West Council Mayor Darcy Byrne explained that the proposal would enable councils to take interest-free loans from the state to deliver infrastructure identified in contributions plans, repaying them as developer contributions are collected. The $3 billion allocation would forward-fund state and regional projects, with costs progressively recovered through Housing and Productivity Contribution receipts. “We’re not asking the state to permanently foot the bill. We’re proposing smarter public financing to deliver more homes and better communities,” Byrne said.
Impact on Housing Targets
LGNSW estimates its proposal could unlock nearly 70,000 homes across eight Greater Sydney growth-area councils and generate $1.8 billion in stamp duty revenue. Case studies highlight the urgency of the funding gap. At Schofields in Sydney’s north-west, an $85 million infrastructure package would support more than 5,000 homes, while without accelerated investment, up to 3,500 homes could be deferred by seven years. In Leppington, south-west Sydney, an estimated $133 million in infrastructure investment is needed to unlock 6,000 homes.
Campbelltown faces similar challenges, with over 12,000 additional lots awaiting rezoning and infrastructure constraints expected to delay about 3,500 homes. The group recommends removing minimum lot sizes in new residential zones, establishing a statewide affordable housing scheme by replacing local government contribution schemes, and offering a seniors right-sizing stamp duty exemption. “Ultimately, the measure of success must be completed homes, greater housing choice, and more affordable places to live,” Ayres stated. “We need government to be agile and responsive to changing market conditions and the challenges facing industry. Feasibility must be central to housing policy.”
UDIA NSW is also targeting regulatory and cost barriers affecting individual projects. With NSW currently 40 per cent behind its Housing Accord completions target, both organizations warn that delays in infrastructure funding will further stall housing supply. Their proposals come at a critical time, as political leaders prepare for the March 2027 state election, with housing affordability and supply at the forefront of public discourse.