HE NSW first homebuyer grant has been extended for two years.
Treasurer Mike Baird said the $15,000 grant for new homes costing up to $650,000 had been extended to January 2016 in the upcoming state budget.
The grant was due to be dropped to $10,000 next year.
"We're saying to every first home owner across the state, if you are thinking of buying - think new," Mr Baird told reporters on Saturday.
Mr Baird said the incentive, which was announced in last year's budget, was working well.
"We are already seeing signs of life in the critical housing sector."
The stamp duty concessions for first homebuyers of new homes will remain in place.
The government also said that $99 million would be set aside for the state's councils to help build infrastructure in growth areas.
The money will fund the gap between what councils can charge developers in infrastructure levies and what it actually costs councils to build infrastructure such as new roads.
Planning Minister Brad Hazzard said he anticipated that most of the $99 million would go to councils in the western Sydney growth areas especially in the Blacktown and Hills areas.
"Right now the big winners are those folks who want to live in and around Blacktown and the Hills because this really does free up the opportunity for new housing."