"This will be more than just a house - it's going to be a home."
A new home for Aboriginal youths transitioning out of foster will be unveiled in Macarthur Heights next year.
Work on the KARI House site began on Tuesday as a partnership between the Aboriginal community support organisation KARI, Property Industry Foundation, Parkview and Rawson Homes.
KARI head of marketing and fundraising Cain Slater said the home was expected to be complete in early 2020 and would house five youths.
"It's six bedrooms for the five young adults and one live-in foster carer who will be there to provide support and assistance as they transition out of foster care and into independent lives," Mr Slater said.
"The house is for Aboriginal young people coming out of foster care who are 18 plus.
"It's really a home environment, it's not going to be like a boarding house.
"The home is in a really beautiful suburb and is very aspirational so the kids feel like they belong."
The $400,000 house will be constructed by Rawson Homes and is funded for KARI by the Parkview Group.
Mr Slater said it could be quite difficult for people leaving foster care to find affordable housing, so the KARI House was a great way to bridge the gap while they found their feet.
Residents can stay for up to two years and Mr Slater said most were expected to live there for at least 12 months.
Research suggests 35 per cent of young people are homeless within the first year of leaving foster care, while 29 per cent are unemployed and 46 per cent of males are involved in the juvenile justice system.
Mr Slater said there were "a few" houses like this in Sydney, but most were older and rundown.
He said KARI house was expected to be a great success and he hoped it could be replicated in other places.
Parkview executive chairman Tony Touma said the company was proud to fund the house.
"When the opportunity to help fund the development of the house arose, we were excited for the prospect of giving back in a tangible way," he said.
"We have been overwhelmed by the support of our suppliers, sub-contractors and partners in assisting with our cause."
Property Industry Foundation chief executive Kate Mills said the home would be a crucial resource for young people leaving foster care as government support for them and their foster families ends when they turn 18.
"We know that young people often leave foster care without good housing options and the Property Industry Foundation is increasing that housing stock across three states including NSW," she said.
"Our goal is to build 125 bedrooms by 2021."
Campbelltown MP Greg Warren praised the community partners for working together on KARI House.
"There is a lot of good will in our community and this is a prime example," he said.
"To be able to have so many organisations come together for this one project is no mean feat.
"I can't wait to see the finished product and how it helps shape the lives of the young tenants."
The housing will initially be free but the residents will gradually have to pay small rent as they transition into becoming more independent.