A new social housing complex will be built in inner Sydney, in response to rising rates of homeless older women who can no longer afford the private rental market.

The NSW Government will spend $7.4 million on the new 20-apartment development in Woolloomooloo, which has been designed specifically for vulnerable older women.

NSW Social Housing Minister, Brad Hazzard, said partnerships between not-for-profit and private sectors were critical to delivering important services to vulnerable people.

The most recent official data of the number of people who are homeless in each state is from the 2011 Census, which reported 28,190 people as being homeless in NSW alone. About 7 per cent were over the age of 65.

This number is expected to be much higher in the next Census data due to be released in April 2017, given the drastic increase in private rental accommodation costs over the last five years in and around Sydney.

Under the NSW Government’s 10 year strategy to deliver more social and affordable housing, there is a focus on the supply and quality of housing for older people, a spokesperson for the Department of Family and Community Services (FACS) said.

Architects from FACS developed the design with pre-construction advice from Women’s Housing Company on the specific design needs of single women, and advice from the Government Architect.

It is expected to be completed by mid 2017.